Chocolate Delights Company produces baking chocolate for use by commercial organizations. The company is analyzing its operations in preparation for reconfiguring its factory setup.
Currently, each batch of chocolate requires the following processes:
a) Calculate the total cycle time necessary to manufacture a batch of chocolate.
b) Identify the value-added functions
c) Calculate the manufacturing cycle efficiency (MCE) of this process.
d) Assume that a management consultant has established a goal that Chocolate Delights
Company increase its MCE to 5 percent or greater. Identify three possible areas in which
the company could reduce its cycle time.
Definitions:
Just-In-Time Inventory
An inventory management strategy where materials are ordered and received only as they are needed in the production process.
Demand-Dependent Inventories
Inventory levels that are maintained based on current demand forecasts, adjusting to meet fluctuations in market requirements.
Aging Schedule
A report listing unpaid customer invoices and unused credit memos by date ranges, used to manage and monitor credit and collections.
Average Collection Period
The average number of days it takes for a business to receive payments owed by its clients.
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