Response to the following problem:
Nonfinancial measures of quality, manufacturing cycle efficiency. (CMA, adapted) Torrance Manufacturing evaluates the performance of its production managers based on a variety of factors, including cost, quality, and cycle time. The following are nonfinancial measures for quality and time for 2010 and 2011 for its only product:
|
Nonfinancial Quality Measures
|
2010
|
2011
|
|
Number of returned goods
|
385
|
462
|
|
Number of defective units reworked
|
1,122
|
834
|
|
Annual hours spent on quality training per employee
|
32
|
36
|
|
Number of units delivered on time
|
12,438
|
14,990
|
|
Annual Totals
|
2010
|
2011
|
|
Units of finished goods shipped
|
14,240
|
16,834
|
|
Average total hours worked per employee
|
2,000
|
2,000
|
The following information relates to the average amount of time needed to complete an order:
|
Time to Complete an Order
|
2010
|
2011
|
|
Wait time
|
|
|
|
From order being placed to start of production
|
8
|
6
|
|
From start of production to completion
|
6
|
7
|
|
Inspection time
|
2
|
1
|
|
Process time
|
4
|
4
|
|
Move time
|
2
|
2
|
Required:
1. Compute the manufacturing cycle efficiency for an order for 2010 and 2011.
2. For each year 2010 and 2011, calculate the following:
a. Percentage of goods returned
b. Defective units reworked as a percentage of units shipped
c. Percentage of on-time deliveries
d. Percentage of hours spent by each employee on quality training
3. Evaluate management's performance on quality and timeliness over the twoyears.