JIT Systems' Manufacturing Efficiency Ratio

question 35

Essay

JIT systems' manufacturing efficiency ratio
Methodical Corporation is considering the implementation of a JIT inventory system.The company recently analyzed its cycle time to determine the average number of days spent in each activity of its production process.A summary of the analysis is shown below: (a)Methodical's value-added production activities include: ________
(b)Methodical's total cycle time is ________ days.
(c)Methodical's manufacturing efficiency ratio is ________%.
(d)Which activities might be reduced or eliminated should Methodical implement a JIT system?

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Definitions:

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet production goals.

Direct Labor-Hours

A measure of the total time workers spend directly manufacturing a product or performing a service.

Direct Labor Rate

The average cost per hour for labor directly involved in the production of goods or services.

Direct Labor Budget

A forecast of the labor costs directly associated with production, factoring in anticipated hourly rates and hours needed.