Exam 19: Balanced Scorecard: Quality and Time

Answer the following questions using the information below: The tool crib at a large manufacturing company is responsible for providing tools to the factory workers on demand. The tool crib has a variable demand. Historically, its demand has ranged from 300 to 500 small tools per day with an average of 400. Diane, the tool crib attendant, works eight hours a day, five days a week. Each order is for one small tool and each small tool takes Diane 1 minute to retrieve from the bins. -What is the average waiting time,in minutes?

Venlaz Corp makes small motorcycles.The monthly demand ranges from 80 to 100 motorcycles.The average demand is 92 motorcycles.The plant operates 300 hours a month.Each cycle takes approximately 1.5 hours. If the company adds a new line of scooters,initial demand will be 20 per month.Each scooter will take 1 hour to make.To offset approaching production capacity,expanding the assembly line is possible.This will decrease manufacturing time for all products by 20%.However,this will increase the costs of cycles from $400 to $500 and scooters from $200 to $240.The change will also cause increases in prices from $700 to $750 for cycles and from $450 to $500 for scooters. Required: a.What is the average waiting time for cycles if they are the only item manufactured? b.What are the average waiting times if both cycles and scooters are produced and the assembly line is not enlarged? c.What are the average waiting times if both cycles and scooters are produced and the assembly line is enlarged? d.What is the expected monthly margin without scooters if the company sells all 92 cycles it manufactures? e.What are the expected monthly contribution margins if scooters are made with the current assembly line and with the new assembly line? Assume average sales and that sales equal production. f.What action do you recommend?

A tool which indicates how frequently each type of defect occurs is a ________.

Answer the following questions using the information below: LaCrosse Products has a budget of $900,000 in 2015 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The new method will require $40,000 in training costs and $100,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units. Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories. -How much will internal failure costs change if the internal product failures are reduced by 1/3 with the new procedures?

Alex is injured and rushed to Care Hospitals for treatment.He spent 45 minutes at the hospital out of which he filled a form for 15 minutes,stood in the queue for 10 minutes,doctor treated him for 15 minutes,and payment time was 5 minutes.What is the service cycle efficiency for his visit?

Wilson's Language School manufactures CDs and DVDs to teach English as a Second Language.Wilson has just prepared a Cost of Quality Report,and the staff has noticed a decline in prevention costs as a percentage of total sales over a three-year period.What changes might Wilson expect to see in appraisal costs as a percentage of sales,internal failure costs as a percentage of sales,and external failure costs as a percentage of sales given this trend?

An example of a nonfinancial measure for customer satisfaction is ________.

Prevention costs include inspection and product testing.

Costs incurred on defective products before being shipped to customers are ________.

Percentage of reworked products is an example of a nonfinancial measure of internal business-process quality.

COQ measures such as measures of customer satisfaction and employee satisfaction are useful indicators of long-run performance.