Lifeboat Yacht Company has always measured divisional performance based solely on financial measures. Top management has started to question this approach and is evaluating alternative measures. The managers are specifically interested in focusing on activities that generate value for their customers, so they are considering the use of throughput as a measure. They have gathered the following data and have asked for your opinion.
Units started into production ........... 300
Total defect-free units completed .......... 294
Total hours of value-added production time ......191,100
Total hours of division production time .......245,000

A. What is Lifeboat’s manufacturing cycle efficiency?
B. What is the total throughput per hour?
C. Is there evidence of potentially poor quality in the production process as measured by the number of defective units? (Remember the type of business.)

  • CreatedMarch 11, 2015
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