Exam 19: Balanced Scorecard: Quality and Time

A machine has been identified as a bottleneck and the source of the constraint for a manufacturing company that has multiple products and multiple machines.Discuss ways the company can overcome the bottleneck.

Diane has been asked to consider plans to add the retrieval of larger tooling fixtures to her duties.She anticipates that there would be an average of 12 tooling fixtures per day requested.Each tooling fixture would take Diane 4 minutes to retrieve. What is the average waiting time,in minutes,if Diane continues to be the only worker that would retrieve the small tools as well as the larger tooling fixtures?

Appraisal costs ________.

Baby Care Products has just completed a very successful program of improving quality in its manufacturing operations.The next step is to improve the operations of its administrative functions,starting with the accounting information system.As the manager of the accounting operations,you are requested to begin a quality improvement program. Required: What are some possibilities of finding out about the current status of quality in the accounting system?

Answer the following questions using the information below: Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day. -What is the total production per day if the change is made?

Which of the following reduces manufacturing cycle times and delays?

Discuss the means by which a company goes about evaluating and installing a new quality improvement program.

The implication of controlling a process at a Six Sigma level is that the process produces only 3.4 defects per million products produced.

$\begin{array}{|l|l|l|l|} \hline\text { Rolevant items } & \begin{array}{l}\text { Cookies with } \\\text { Rashew and } \\\text { honey }\end{array} & \text { Plain cookies } &\text { Difference } \\\hline\\\hline \begin{array}{l}\text { Expected } \\\text { revenue }\end{array} & \$ 850,000 & \$ 725,000 & \$ 125,000 \\\hline \begin{array}{l}\text { Expected } \\\text { variable costs }\end{array} & 548,000 & 418,000 & (130,000) \\\hline \begin{array}{l}\text { Expected } \\\text { nventory } \\\text { carrying cost }\end{array} & 32,000 & 22,000 & (10,000) \\\hline \begin{array}{l}\text { Expected total } \\\text { costs }\end{array} & 580,000 &440,000&(140,000)\\\hline \begin{array}{l}\text { Expected } \\\text { profits }\end{array} & \$ 270,000 & \$ 285,000 & \$(15,000)\\\hline\end{array}$ Dulcet Foods,Inc.,has the option to sell either of the variant.Which one is a better alternative?

A tool that distinguishes random from nonrandom variations in an operating process is a ________.

Which of the following is a learning-and-growth measure to study the output during bottleneck situations?

When using a control chart,the observations outside the upper and lower control limits are ordinarily regarded as nonrandom and worth investigating.

Answer the following questions using the information below: Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day. -What is the change in the daily contribution margin if the change is made?

Ventaz Corp manufactures glasses.The manufacturing cycle efficiency is 70%.What is its waiting time if the manufacturing lead time is 120 minutes per keyboard?

One way to increase capacity is to reduce the time it takes for setups and processing.

Answer the following questions using the information below: Monticello Corp manufactures expensive tables. Its varnishing department is fully automated and requires substantial inspection to keep the machines operating properly. An improperly varnished table is very expensive to correct. Inspection hours for the 5,000 tables varnished in September totaled 1,500 hours by 8 employees. Eight quarts of varnish were used, on average, for each table. The standard amount of varnish per table is nine quarts. The cost of inspection for September was equal to the budgeted amount of $40,000. -The $40,000 represents a(n)________.

Dawn and Kim just bought a bed and breakfast inn at a very attractive price.The business had been doing poorly.Before they reopened the inn for business,they attended a seminar on operating a high quality business.Now that they are ready to open the inn,they need some advice on quality costs and management. Required: Identify four categories of quality costs.In addition,identify three items that would be classified in each of the categories.

When considering customer needs and wants,only financial measures can be used,since they are easily measured.

Northern Corp is concerned about its declining sales,especially the reduction in the number of customers.For the last two years,its shirts have won industry awards for high quality and trend-setting styles.At the latest executive managers' meeting,all were blaming each other for the decline.After much discussion and presenting some fact-finding information,it was determined that sales relationships were the cause of most of the problems. Required: What may be some of the causes and how can the causes be detected if product quality is not an issue?

Manufacturing lead time is the sum of waiting time and manufacturing time for an order.