Reference no: EM132690774

Problem - Lead time - Audio Max Electronics Company manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) card assembly, final assembly, testing, and shipping. In the PC card assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 80 printed circuit boards. Each board requires 5 minutes of assembly time. After each batch is completed, the operator moves the assembled cards to the final assembly area. This move takes 10 minutes to complete.

The final assembly for each stereo unit requires 20 minutes and is also done in batches of 80 units. A batch of 80 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30 minutes. The units wait while the setup is performed. In the final test, the 80-unit batch is tested one at a time. Each test requires 7 minutes. The completed batch, after all testing, is sent to shipping for packaging and final shipment to customers. A complete batch of 80 units is sent from final assembly to shipping. The Shipping Department is located next to final assembly. Thus, there is no move time between these two operations. Packaging and labeling requires 8 minutes per unit.

Instructions -

1. Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average stereo unit in a batch of 80 units. Round percentages to one decimal place. Categorize the non-value-added time into wait and move time.

2. How could this process be improved so as to reduce the amount of waste in the process?