ch 12

Question 1

0.5 day = Inspection time
15.7 days = Wait time
2.9 daysProcess time
0.8 day = Move time
4.4 days = Queue Time

Calculate
1. throughput time
2. manufacturing cycle efficiency (MCE)
3. percentage of throughput time spent in non-value-added activities
4. delivery cycle time
5. if queue time was eliminated, the new MCE

Answer 1

1. 8.6 days
2. 34%
3. 66%
4. 24.3 days
5. 69%

Question 2

working capital

Answer 2

end of period - capital released or recovered = capital inflows; capital outflows = inventory

Question 3

What are cash outflows? What are some examples?

Question 4

What are cash inflows? Examples?

Answer 4

Money coming in

Ex. Salvage value, reduction costs, incremental revenues, release of working capital

Question 5

Payback Method

Answer 5

how long it will take to recover initial investment; two types: equal cash flows, uneven cashflows

Question 6

Strengths and weaknesses of Payback Method

Question 7

Payback Period Formula

Answer 7

Payback period = investment required / annual net cash inflow