The Cuddly Creations Company: Productivity improvement: compensation based on performance; computation of manufacturing cycle efficiency, process productivity, process quality yield and hourly throughput.
The Cuddly Creations Company produces small plastic dolls in its Georgia manufacturing plant. The company is currently evaluating ways to improve productivity. The accountant of the firm's parent organization suggested that management implement a new compensation plan based on throughput performance measure as an incentive to increase productivity. To demonstrate how such a measure might work, the accountant gathered the following production data for a recent month:
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Total units attempted
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6,000,000
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Good units manufactured
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4,800,000
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Processing time (total hours)
|
800
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Value-added processing time
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600
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a. How many defective units were produced?
b. Compute manufacturing cycle efficiency.
c. Compute process productivity.
d. Compute process quality yield.
e. Compute hourly throughput.