A Company Has Successfully Implemented Lean Practices in Their Three

question 28

Multiple Choice

A company has successfully implemented Lean practices in their three station process. The stations are, in order, Station A, Station B, and Station C and product moves from A to B to C smoothly. One day, the equipment at Station B experiences catastrophic failure. What happens and what is the appropriate response for a Lean-thinking company?

• A)Continue producing at Station C and restore capacity at Station B.
• B)Continue producing at Station A and restore capacity at Station B.
• C)Continue producing at Station A and C and restore capacity at Station B.
• D)Everything stops and attention is focused on restoring capacity at Station B.

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Definitions:

Investment Turnover

A ratio that measures the efficiency of a company in using its investments to generate sales revenue, reflecting how effectively assets are being utilized.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses like wages, depreciation, and cost of goods sold.

Invested Assets

Items acquired or bought with the intention of earning income or profit.

Profit Margin

A financial metric displaying the percentage of revenue that remains as profit after all expenses have been deducted.