Time Performance Measurement

1. Theoretical Velocity units/time

360,000 units 1 quarter
= x
1 quarter 60,000 hours

360,000 units 6 units

= '=
60,000 hours hour

Theoretical Cycle Time time/units

1 quarter 60,000 hours 60 minutes
= x x
360,000 units 1 quarter 1 hour

3,600,000 minutes 10 minutes

= =
360,000 units unit

Alternative Solution:
1 hour 60 minutes
= x
6 units 1 hour
60 minutes 10 minutes
= =
6 units unit

2. Conversion cost per minute (theoretical)

$ 720,000 1 quarter 1 hour
= x x
1 quarter 60,000 hours 60 minutes
$ 720,000 $ 0.20
= = per
3,600,000 minutes minute

*Conversion cost per unit (theoretical/ideal)

10 minutes $ 0.20
x = $ 2.00 per unit
1 unit 1 minute
3. Manufacturing Cycle Time
Process 10
Move 12 given
Wait 10 given
Inspection 18 given
Total 50 minutes

*Conversion Cost per unit (actual)

= 50 minutes $ 0.20
x = $ 10.00 per unit
1 units 1 minute

Manufacturing Cycle Efficiency (MCE)

Value Added Time 10
= = = 20%
= = = 20%
Throughput Time 50

4. Non-value added time

Move 12 given
Wait 10 given
Inspection 18 given
Total 40 minutes

*Conversion Cost per unit (NVA)

= 40 minutes $ 0.20
x $ 8.00 per unit
1 unit 1 minute

or simply $ 10.00 - $ 2.00 = $ 8.00 per unit

Theoretical velocity - ideal, wala kang non-value adding
Time Performance Measures
Velocity units/time
Cycle Time time/units
Manufacturing Cycle Effciency (MCE) % Value Added Process time
Valued Added/Throughput time Move time
Non Value
P/(P+M+I+W) Added Inspection time
Wait/Queue time

Velocity - gaano karami nagagawa mong units at a given time

Speed (CT) - gaano mo kabilis nagagawa ang product at a given time
MCE - out of your total cycle time, ilang % dun ang Valued Added

Conversion cost per Unit Cycle time x Conversion cost per time
Delivery cycle time Wait time + Throughput time
Customer Response time Receipt time + (Waiting time + Manufacturing time) + Delivery time

*Inside the Manufacturing Process

(Ave. Demand x Manufacturing time^2)
Waiting time
(2 x Unused capacity)

Noreen-Garrison

Assumption: after mamanufacture, mashiship na agad

Horngren
Compare to Noree-Garrison and Hansen, queue time (waiting time) is given, but in Horngren, this is
computed/estimated, based sa Manufacturing time and Capacity ng Planta.
Process time - essential to convert raw materials to finish products. Without this, we can't convert product
Move time - possible mawala 'to basta magkakalapit ang dep't
Inspection time - possible din na wala 'to if products are good or within the standard
Wait/Queue time - possible din nawala to if maganda ang scheduling process
1. Throughput time
Process 2.0 days
Move 0.6 days
Queue 5.0 days
Inspection 0.4 days
Total 8.00 days

2. Only process time represents value-added time; therefore, the computation of the MCR would be as follows:
Value-added time 2.00 days
MCE = =
Throughput time 8.00 days
= 25%

Thus, once put into production, a typical unit is actually being worked on only 25% of the time.

3. Non-value added time (NVA)

Move 0.6 days
Queue 5.0 days
Inspection 0.4 days
Total 6.0 days

NVA time 6.0

NVA time % = =
Throughput time 8.0
= 75%
Shorter Solution
= 100% - MCE
= 100% - 25%
= 75% of total production time is spent in non-value added (NVA) activities

4. Delivery cycle time

Wait time 17.0 days
Throughput 8.0 days
time
Total 25.0 days
ld be as follows:

NVA) activities
Annual average number of orders for gears 92 motorcycles
Manufacturing time per order for gears 1.5 hours
Annual machine capacity 300 hrs a month

(Ave. Demand x Manufacturing time^2)

Waiting time
(2 x Unused capacity)

1. Average waiting time

92 x 1.5^2 207
= =
2 x [300-(92 x 1.5)] 324
= 0.639 hour
in each motocycle, kelangan maghintay ng .639 hrs bago sya simulang gawin. Nagstart na ang
production, pero may queue time sya before i-start i-manufacture.

Delivery cycle time

Wait time 0.639 hrs
Manufacturing time 1.5 hrs
Total 2.139 hours
it takes 2.139 hrs for you to finish each motorcycle

2. Average waiting time (both motorcycles and scooters)

20 scooters
1 hour
(92 x 1.5^2) + (20 x 1^2) 227
= =
2 x [300-(92 x 1.5) - (20 x 1)] 284
= 0.799 hrs

Delivery cycle time (motorcycle)

Wait time 0.799 hrs
Manufacturing time 1.5 hrs
Total 2.299 hours for you to finish an average of 1 scooter

Delivery cycle time (scooter)

Wait time 0.799 hrs
Manufacturing time 1 hrs
Total 1.799 hours for you to finish an average of 1 scooter
Nasa iisang planta lang sila so same lang ng ave. waiting time, pero nagkaiba lang sa manufacturing time.
Mag-iiba lang ng waiting time kung magkaiba ng planta or assembly line

3. Average waiting time (both motorcycles and scooters)

92 motorcycle 20 scooters
1.2 hours 0.8 hour
(92 x 1.2^2) + (20 x 0.8^2) 145.28
= =
 = =
2 x [300-(92 x 1.2) - (20 x 0.8)] 347.2
= 0.418 hours
much shorter as compare to the waiting time when you did not expand your assembly line/ Mas mabilis sya so mas mabilis ma

Delivery cycle time (motorcycle)

Wait time 0.418 hrs
Manufacturing time 1.2 hrs
Total 1.618 hours

Delivery cycle time (scooter)

Wait time 0.418 hrs
Manufacturing time 0.8 hrs
Total 1.218 hours

4. Without changing the assembly line

Selling price
Cycles $ 700 $ 750
Scooters $ 450 $ 500
Cost of cycle
Cycles $ 400 $ 500
Scooters $ 200 $ 240

Total Analysis (status quo)

Cycles Scooters Total
Sales
(92 x $700) $ 64,400
(20 x $450) $ 9,000
Cost of Manufacturing
(92 x $400) $ 36,800
(20 x $200) $ 4,000
Expected Margin $ 27,600 $ 5,000 $ 32,600

With new assembly line

Cycles Scooters Total
Sales
(92 x $750) $ 69,000
(20 x $5000) $ 10,000
Cost of Manufacturing
(92 x $500) $ 46,000
(20 x $240) $ 4,800
Expected Margin $ 23,000 $ 5,200 $ 28,200

Change in Expected Margin $ -4,400

Alternative Solution (Differential
Analysis) Cycles Scooter Total
Change in Sales
Cycles (92 x ($750 - 700) $ 4,600
Scooters [20 x ($500-450) $ 1,000 $ 5,600
Change in Manufacturing Cost
Cycles (92 x ($500 -400) $ 9,200
Scooters [20 x ($240-200) $ 800 $ 10,000

Change in Expected Margin $ -4,400

Analysis: Stick with selling cycles and scooters as compared sa pabibilisan ko nga pero liliit naman ang profit. Bawal
naman magsesell ka ng motorcycles tas ieexpand si scooter since nasa isang assembly line lang kayo. Kung iimprove
yung isa, maaapektuhan yung isa. Kailangan kung iimprove mo yung isang product, damay lahat ng product sa
assembly line na iyon.
Final Solution: Sell both motorcycles and scooters
turing time.
s mabilis sya so mas mabilis masatisfy ang customer.
man ang profit. Bawal
g kayo. Kung iimprove
ahat ng product sa