Under the current method of production, small heaters pass through several departments, where each department has a
Question:
Under the current method of production, small heaters pass through several departments, where each department has a collection of similar machines. The first department cuts a metal pipe into one of three lengths: three, four, or five inches long. The cut pipe is then taken to the laser department, where the part number is printed on the pipe. In another department, ceramic cylinderscut to smaller lengths than the pipeare wrapped with a fine wire (using a wrapping machine). The pipe and the wrapped ceramic cylinders are then taken to the welding department, where the wrapped ceramic cylinders are placed inside the pipe, centered, and filled with a substance that prevents electricity from reaching the metal pipe. Finally, the ends of the pipe are welded shut with two wire leads protruding from one end. This completed heater is then transferred to the testing department, which uses special equipment to see if the heater functions properly.
The small heaters are produced in batches of 300. It takes 50 hours to cut 300 metal pipes and prepare 300 ceramic cylinders (1/6 hr. per unit, both processes occurring at the same time). After 50 hours of production time, the 300 metal pipes are transported to the laser department (20 minutes transport time), and the 300 ceramic cylinders are transported to the welding department (20 minutes transport time). In the laser department, it takes 50 hours to imprint the part number (1/6 hr. per pipe). The 300 metal pipes are then transported to the welding department. In the welding department, the ceramic and metal pipes are joined and welded. The welding process takes 50 hours (1/6 hr. per pipe). Finally, the 300 units are transported (20 minutes) to the testing department. Each unit requires 1/6 hour for testing, or a total of 50 hours for the 300 units. From start to finish, the total production time for the 300 units is as follows:
Cutting and ceramic50 hrs.
Laser50
Welding 50
Testing 50
Moving 1
Total time 201 hrs.
Notice that laser must wait 50 hours before it can begin imprinting. Similarly, welding must wait 100 hours before it can begin working on the batch, and finally, testing must wait 150 hours before it can begin working on the batch. Based on the information gathered, Kim estimated that the production time for 300 units could be cut from 201 hours to about 50 hours by creating a small heater manufacturing cell.
1.Explain, with computational support, how the production time for 300 units can be reduced to about 50 hours. If this is a true reduction in production time, what implications does it have for Reddy's competitive position?
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan