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Unformatted text preview: ﬁnancial objectives. To provide the framework needed for this perspective. a process
value chain is deﬁned. The process value chain is made up of three processes: the
innovation process. the operations process. and the postsalcs service process. 'Some measures of process pei§p_cctive: Cycle time is the length of time it takes to produce a unit of output from the time
materials are received (starting, point ofthe cycle) until the good is delivered to ﬁnished
goods inventory (ﬁnishing point of the cycle). Or maybe called Dock-to-Dock time. Velocity is the number ofunits ol'output that can be produced in a given period oftime. Manufacturing Cycle Efﬁciency (MCE) measures the proportion of value adding time out
oftotal time (both useful and wasteful). ll'there is no waste time, MCE=l. Cycle timc:Time/Llnits produced .- t“ L. ,v I _, l Velocity : units produced/time
MC E= processing time /(processing time+ move timc+ inspection tinie+ waiting time)
Or = theoretical conversion cycle time/actual cycle time D. Learning am! Growth Perspective The learning and growth perspective is the source ol‘thc capabilities that enable the
accomplishment ot‘the other three perspectives' objectives. This perspective has three
major objectives: increase employee capabilities; increase motivation. empowerment, and
alignment; and increase information systems capabilities. Practice
I. An accounting system designed For a lean production environment would be more likely to
inciude which ofthe ibllowing? a) An inventory driven focus b) A unit responsibility focus c) A volume focus A value-chain focus 3. A manufacturing cell has the theoretical cycle time capability of producing 40.000 microchips
per quarter. The conversion cost per quarter is $25000. There are 4.000 production hours available within the cell per quarter. The theoretical velocity per hour is a. 25.00 units. i, its},
b, l6.00 units, I i L. 1c." [0.00 units. 1‘ ‘ I Y ' , in)
d. 2.34 units. "
’ . i _ I \|\l I
t \, 4. McDougail Company charges cost plus 25%. It‘the price ot'an item is $80.
what is the item‘s cost? a) $80 b) $100 c) $62.50 d) $64 LET $60 5. Falkner Company is designing a portable DVD player aimed at families traveling with young
children. The company believes that the product can be sold for $140; and it requires a 20% profit
on new products. What is the target cost ofthe portable DVD player? a. $l40
e. $168 6. Brad Company developed the following budgeted life-cycle income statement for two
proposed products. Each product's life cycle is expected to be two years. Product A Product B M Sales $200300 $200,000 $400,000
Cost ofgoods sold [20 000 I30 000 250,000
Cums proﬁt £80309 3; 7_QLQ_0_0 $150,000
Period expenses: Research and development (70.000) Marketing (50000)
Life-cycle income $7 304009 A I0 percent return on sales is required for new products. Because the proposed products did not
have a 10 percent return on sales. the products were going to be dropped. Relative to Product B, Product A requires tnore research and development costs but fewer
resources to market the product. Sixty percent ofthe research and development costs are traceable
to Product Al and 30 percent ofthe marketing costs are traceable to Product A. lfrcsearch and development costs and marketing costs are traced to each product. life-cycle
income for Product A would be a. s3 8.000.
‘d. $15000. 103' c. 7“ ...
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- Spring '08