Strategic Business Analysis

Formulas

TIME PERFORMANCE MEASURES

PRODUCTIVITY MEASURES
units
 Velocity =
time Output
 Partial Productivity Ratio (PPR) =
Input
time
 Cycle Time =
unit  Total Factor Productivity (TFP) Ratio =
Output
 Conversion cost per unit = Total Cost of Inputsusing Current Price
cycle time x conversion cost per minute
 Productivity-Neutral Quantity (PQ) =
 Manufacturing Cycle Efficiency (MCE) = Current Year Output
Value Added∨Process Prior Year PPR
Throughput time
 Growth Component =
 Throughput Time (TT) = ( PQ−Prior year quantity ) x Prior Year Price
Process ( P )+ Move ( M ) + Inspection ( I )+Queue (Q)
 Price Recovery Component =
 Non-value-added time = M + I +Q ( Current Year Price−Prior Year Price ) x PQ Quantity

 Non-value-added (%) = 100 %−MCE  Productivity Component =

( Current Year Price−PQ ) x Current Year Price
 Delivery Cycle Time/Manufacturing Cycle
Time = Wait Time (W ) +TT THROUGHPUT ANALYSIS

 Average waiting time (W) =

Goodunits
Average Demand x Manufacturing Time 2  Throughput =
total time
2 x Unused Capacity
 Throughput = MCE x Process productivity x
 Unused capacity = p rocess quality yield
Annual Machine Capacity− ( Annual average units x manutime per unit )

 Total Manufacturing time = Total units

 Process Productivity =
Average Demand x ManufacturingTime 2 VAT

Good units
 Customer-response Time =  Process Quality Yield =
Receipt time+ Delivery cycle time+ Delivery time total units

 Y=axb; b = ln(learning curve)/ln(2)

 Conversion cost per unit =
Cycle Time x Conversioncost per minute