Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board a

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Sound Tek Inc. manufactures electronic stereo equipment. The
manufacturing process includes printed circuit (PC) board assembly,
final assembly, testing, and shipping. In the PC board 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 50 printed circuit
boards. Each board requires 4 minutes of board assembly time. After
each batch is completed, the operator moves the assembled boards to
the final assembly area. This move takes 10 minutes to
complete.
The final assembly for each stereo unit requires 18 minutes and
is also done in batches of 50 units. A batch of 50 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 50-unit batch is tested one at a time. Each test requires
11 minutes. The completed batch, after all testing, is sent to
shipping for packaging and final shipment to customers. A complete
batch of 50 units is sent from testing to shipping. The Shipping
Department is located next to testing. Thus, there is no move time
between these two operations. Packaging and labeling requires 12
minutes per unit.
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 50 units. Categorize the non-value-added time into wait
and move time. Round the percentage to one decimal place.
2. Move time in this process could best
be reduced by:
a. Doing nothing.
b. Changing the layout from a process orientation to a product
orientation.
c. Increasing batch sizes.
d. Eliminating the testing step.
e. Hiring more workers.