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Sarasota Company manufactures pillows in the cutting and assembly process. Pillows are manufactured in 40-pillow batch sizes. The cutting time is 4 minutes per pillow. The assembly time is 8 minutes per pillow. It takes 10 minutes to move a batch of pillows from cutting to assembly. Compute the value-added ratio.
a.2.4%b.54.5%c.4.5%d.50%

Respuesta :

Answer: Option (b) is correct.

Explanation:

Given that,

Pillows are manufactured in 40-pillow batch sizes

Cutting time = 4 minutes per pillow

Assembly time = 8 minutes per pillow

Takes 10 minutes to move a batch of pillows from cutting to assembly.

Value added lead time = Cutting time  + Assembly time

                                      = 4 + 8

                                      = 12 minutes

Non-value added lead time = move time

                                              = 10 minutes

Total lead time = Value added lead time + Non-value added lead time

                         = 12  + 10

                         = 22 minutes

value-added ratio = [tex]\frac{value\ added\ time}{total\ lead\ time}[/tex]

                              =  [tex]\frac{12}{22}[/tex]

                              = 0.5454

                              = 54.5%

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