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Christmas Express Makes Wreaths in Batch Sizes of 12

question 17

Essay

Christmas Express makes wreaths in batch sizes of 12. The cutting & assembly process takes 7 minutes per wreath and the decorating process time is 10 minutes per wreath. It takes 12 minutes to move the wreaths from the cutting & assembly process to the decorating process.
(a) Compute the value-added, non-value-added, and the total lead time of the wreath process.
(b) Compute the value-added ratio. Round to the nearest decimal.


Definitions:

Expected Returns

A projection of the amount of profit or loss an investment is likely to generate, factoring in various probabilities.

Higher-Risk Assets

Refers to investments that carry a greater possibility of losing value but offer a higher potential for financial rewards compared to lower-risk assets.

Derivative Security

A financial security whose value is derived from the value of an underlying asset, such as stocks, bonds, commodities, or currencies.

Common Share

A type of equity security that represents ownership in a corporation and entitles the holder to voting rights and dividends.

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