Question

Sarasota Company manufactures pillows in the cutting and assembly process. Pillows are manufactured in 40-pillow batch sizes. The cutting time is 4 minutes per pillow. The assembly time is 8 minutes per pillow. It takes 10 minutes to move a batch of pillows from cutting to assembly. Compute the value-added ratio.

a.2.4%b.54.5%c.4.5%d.50%

Answer 1

Answer: Option (b) is correct.

Step-by-step explanation:

Given that,

Pillows are manufactured in 40-pillow batch sizes

Cutting time = 4 minutes per pillow

Assembly time = 8 minutes per pillow

Takes 10 minutes to move a batch of pillows from cutting to assembly.

Value added lead time = Cutting time + Assembly time

= 4 + 8

= 12 minutes

Non-value added lead time = move time

= 10 minutes

Total lead time = Value added lead time + Non-value added lead time

= 12 + 10

= 22 minutes

value-added ratio =
`(value\ added\ time)/(total\ lead\ time)`

=
`(12)/(22)`

= 0.5454

= 54.5%