U-Go-Mugs Company manufactures souvenir travel mugs. Orders for 36,960 mugs were received during February, with deliveries scheduled evenly throughout the month of March. Mugs are produced simultaneously in 8 manufacturing cells. Time available for production in each cell is 7 hours per day for 22 days during March.

Required:

A. Calculate the takt time.

B. At the end of the first hour of a day’s production, one cell had completed 30 good mugs, including 2 mugs that were reworked.

1. Calculate the day-by-the-hour results and the variance.

2. Calculate the first time through (FTT) rate.

3. Assume the company expects an FTT rate of 93.5%. Was production in the cell out of control during the first hour of the day (round to whole numbers)? Discuss.

C. At the end of the sixth hour of a day’s production, one cell had completed 28 good mugs, including 4 mugs that were reworked.

1. Calculate the day-by-the-hour results and the variance.

2. Calculate the first time through (FTT) rate.

3. Assume the company expects an FTT rate of 93.5%. Was production in the cell out of control during the first hour of the day (round to whole numbers)? Discuss.

D. Suppose the company had received orders for only 32,340 mugs to be delivered during March. Would this mean that the workers in each cell could work more slowly than when 36,960 mugs were ordered?

E. Evaluate the situation in part D from a strategic perspective.