Week 6-7

ULOa. Discuss the basic features of the Balanced Scorecard and the delivery
performance measures.

Let’s Analyze
Activity 1. Let us test your skill in using delivery performance measures. Read each
problem carefully and provide what is being required.

Problem 1 (adapted)
The Cute Corporation produces small plastic dolls in its Florida 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:
Total units attempted 6,000,000
Good units manufactured 4,800,000
Processing time (total hours) 800
Value-added processing 600
Required:
1. How many defective units were produced? 1.2M
2. Compute manufacturing cycle efficiency (MCE). 0.75
3. Compute process productivity. 10T
4. Compute process quality yield. 0.80
5. Compute hourly throughput. 6,000

Problem 2 (adapted)
Electron Inc. produces a variety of electronic products which it sells to retail stores
throughout the country. The following data is available for the year for one of the
products:
Units started into production 2,000,000
Total goods units completed 1,950,000
Total hours of value-added production time 300,000
Total production hours 380,000
Required:
1. Compute the manufacturing cycle efficiency (MCE). 78.79%
2. What is the total throughput per hour? 5.13 units

Problem 3 (adapted)
The following information for a recent project was taken from the records of Glory
Company:
Days
Process Time 15.0
Inspection 0.5
Waiting Time
From order receipt until start of production 6.0
From start of production through project completion 3.0
Move Time 1.5
Required:
1. How long did it take to complete the project once production commenced?
Throughput = 20 days
2. Compute the manufacturing cycle efficiency. 75%
3. As judged by the cycle efficiency, what percentage of the overall production time
was spent on (1) value adding activities and (2) non-value adding activities? 75%-
25%

Problem 4 (adapted)
Ninong Corporation’s management keeps track of the time it takes to process orders.
During the most recent month, the following average times were recorded per order:

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 Days
Wait Time 15.6
Inspection Time 0.8
Process Time 1.6
Move Time 0.7
Queue Time 3.9
Required:
1. Compute the throughput time. 7
2. Compute the manufacturing cycle efficiency (MCE). 22.86%
3. What percentage of the production time is spent in non-value-added activities?
77.14%
4. Compute the delivery cycle time. 22.6 days

Problem 5 (adapted)
Laredo Company is a manufacturer of electronic components. The following
manufacturing information is available for the month of May:

Good units manufactured 40,000

Value-added hours of manufacturing time 20,000
Total units manufactured 50,000
Total hours of manufacturing time 30,000
Required:
1. What is the throughput per hour? 1.3 units
2. What is the process quality yield? 80%

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