Turnkey Manufacturing evaluates the performance of its production managers based on a variety of factors, including cost, quality, and cycle time. The following are nonfinancial measures for quality and time for 2016 and 2017 for its only product:
Nonfinancial Quality Measures 2016 2017
Number of returned goods..........................................500............1,000
Number of defective units reworked............................2,500............2,000
Annual hours spent on quality training per employee............36.................54
Number of units delivered on time............................20,000............34,000
Annual Totals 2016 2017
Units of finished goods shipped................................25,000..........40,000
Average total hours worked per employee.....................1,800............1,800
The following information relates to the average amount of time needed to complete an order:
Time to Complete an Order 2016 2017
Wait time
From customer placing order to order being received by production.............14......10
From order received by production to machine being set up for production......9........7
Inspection time..............................................................................5........3
Process time..................................................................................4........4
Move time....................................................................................2........2
Required:
1. Compute the manufacturing cycle efficiency for an order for 2016 and 2017.
2. For each year 2016 and 2017, calculate the following:
a. Percentage of goods returned
b. Defective units reworked as a percentage of units shipped
c. Percentage of on-time deliveries
d. Percentage of hours spent by each employee on quality training
3. Evaluate management's performance on quality and timeliness in 2016 and 2017.