Compufirm Incorporated requires an average lead time of 37 days on customer orders that require parts not kept in stock. When such a customer order is received, the parts order is placed with a vendor immediately by telephone and the parts are received in an average of 18 days. The parts are inspected and put into production an average of two days after receipt. The average time spent in production is 12 days. After production is completed, the order goes through final inspection in two days and arrives at the customer's site after an additional three days, on average.
Management plans to leave the rate of final output unchanged, induce vendors to reduce their total lead time by one-sixth, and reduce the average size of WIP to one-third of its present level.
Required:
Assuming management's plans are implemented successfully, calculate the average lead time on customer orders that require parts not kept in stock.