Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time
Within batch wait time
Move time
Total
Value-Added Time / Total Time = Value-Added Ratio
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time
Within batch wait time
Move time
Total
Value-Added Time / Total Time = Value-Added Ratio
Answers are entered in the cells with gray backgrounds.
Score:
Key Code:
Instructions
Traditional Philosophy
Lean Manufacturing Philosophy
Exercise 27(12)-6
Name:
Section:
0%
[Key code here]
Cells with non-gray backgrounds are protected and cannot be edited.
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time 12 - 12
Within batch wait time - 348 348
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time 12 - 12
Within batch wait time - 36 36
Cells with non-gray backgrounds are protected and cannot be edited.
Traditional Philosophy
Exercise 27(12)-6
Name:
Solution
Section:
Lean Manufacturing Philosophy
Score:
Instructions
Answers are entered in the cells with gray backgrounds.
ON
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time
Within-batch wait time
Move time
Total
Value-Added Time / Total Time = Value-Added Ratio
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time
Within-batch wait time
Move time
Total
Value-Added Time / Total Time = Value-Added Ratio
Answers are entered in the cells with gray backgrounds.
Score:
Key Code:
Instructions
Cells with non-gray backgrounds are protected and cannot be edited.
Present Approach
Proposed Lean Approach
Exercise 27(12)-7
Name:
Section:
0%
[Key code here]
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time 20 - 20
Within-batch wait time - 880 880
Value-Added Non-Value- Total
Time
Added Time
Time
Value-added time 20 - 20
Within-batch wait time - 40 40
Exercise 27(12)-7
Name:
Solution
Section:
Proposed Lean Approach
Score:
Instructions
Answers are entered in the cells with gray backgrounds.
ON
Key Code:
Cells with non-gray backgrounds are protected and cannot be edited.
Present Approach
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
Enter a zero in cells you would otherwise leave blank.
a. & b.
Activity
1:00 PM Arrives at doctor office
Waits in waiting room (5 x 5 min.)
Waits in examining room
Nurse takes readings
Waits in examining room
Doctor performs diagnosis
Waits to pay for services
Walks to pharmacy
Waits to fill prescription (4 x 5 min.)
Prescription is filled
Drives home
Total
Simmons arrives home at:
c.
Value-Added Time / Total Time = Value-Added Ratio
d.
Total time
[Key essay answer here]
(a)
Elapsed
Time
Value-Added
Time (Min.)
(b)
Non-Value-
Added Time
(Min.)
Exercise 27(12)-8
Name:
Section:
Cells with non-gray backgrounds are protected and cannot be edited.
0%
[Key code here]
Answers are entered in the cells with gray backgrounds.
Score:
Key Code:
Instructions
ON
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
Enter a zero in answer cells you would otherwise leave blank.
a. & b.
Activity
1:00 PM Arrives at doctor office
1:25 PM
Waits in waiting room (5 x 5 min.)
- 25
1:30 PM Waits in examining room - 5
2:50 PM Waits to fill prescription (4 x 5 min.) - 20
2:55 PM Prescription is filled 5 -
3:10 PM Drives home 15 -
c.
d.
(a)
Elapsed
Time
The doctor requires patients to wait in order to increase the productivity of the office. The patients
represent the “work in process inventory” of the office, while the physician and nurses are the critical
productive resources. The clinical staff remains productive because there is always a supply of patients to
serve. The physician never loses productive minutes providing patient care by waiting for a patient.
Name:
Section:
Score:
Exercise 27(12)-8
Value-Added
Time (Min.)
(b)
Non-Value-
Added Time
(Min.)
Instructions
Answers are entered in the cells with gray backgrounds.
Solution
Cells with non-gray backgrounds are protected and cannot be edited.
An asterisk (*) will appear to the right of an incorrect entry. The optional table and essay answer will not be graded.
Enter a zero in cells you would otherwise leave blank.
a.
Activity
Quality Activities Cost
Billing error correction
Cable signal testing
Reinstalling service (installed incorrectly the first time)
Repairing satellite equipment
Repairing underground cable connections to the customer
Replacing old technology cable with higher quality cable
Replacing old technology signal switches with higher quality switches
Responding to customer home repair requests
Training employees
Total
Optional: Completion of the following table may be helpful in organizing data and determining totals for the reports for requirements b and c below.
Internal External Value- Non-Value-
Quality Activities Prevention Appraisal Failure Failure Added Added
Billing error correction
Cable signal testing
Reinstalling service (install incorrectly the first time)
Repairing satellite equipment
Repairing underground cable connections to the customer
Replacing old technology cable with higher quality switches
Replacing old technology signal switches with higher quality switches
Responding to customer home repair requests
Training employees
Total
b.
Percent of Percent of
Quality Cost Quality Total Total
Classification Cost Quality Cost Sales
Prevention
Appraisal
Internal failure
External failure
Total
c.
Category Amount Percent
Value-added
Non-value-added
Total
d.
Value-Added/
Cost of Quality
Classification
Non-Value-Added
Classification
VA/NVA
DIGITAL RIVER INC.
Cost of Quality Report
Cost Summary
Quality Cost Classification
DIGITAL RIVER INC.
Exercise 27(12)-20
Name:
Section:
[Key essay answer here]
Value-Added/Non-Value-Added Activity Analysis
0%
[Key code here]
Answers are entered in the cells with gray backgrounds.
Score:
Key Code:
Instructions
Cells with non-gray backgrounds are protected and cannot be edited.
An asterisk (*) will appear to the right of an incorrect entry. The optional table and essay answer will not be graded.
Enter a zero in cells you would otherwise leave blank.
a.
Activity
Quality Activities Cost
Billing error correction 36,000$
Cable signal testing 96,000
Reinstalling service (installed incorrectly the first time) 30,000
Optional: Completion of the following table may be helpful in organizing data and determining totals for the reports for requirements b and c below.
Internal External Value- Non-Value-
Quality Activities Prevention Appraisal Failure Failure Added Added
Billing error correction -$ -$ -$ 36,000$ -$ 36,000$
Cable signal testing - 96,000 - - 96,000 -
Reinstalling service (install incorrectly the first time) - - - 30,000 - 30,000
b.
Percent of Percent of
Quality Cost Quality Total Total
Classification Cost Quality Cost Sales
Prevention 360,000$ 60.0% 18.0%
c.
Category Amount Percent
Value-added 456,000$ 76%
d.
VA/NVA
The reports indicate that Digital River Inc.’s total costs of quality are 30% of total sales. In addition, 60% of
the activity cost goes toward prevention activities. As a result, Digital River is able to avoid high internal and
Cost of Quality Report
Cost Summary
DIGITAL RIVER INC.
Value-added
Non-value-added
Appraisal
External failure
Value-Added/
Non-Value-Added
Classification
Non-value-added
Cost of Quality
Classification
External failure
Value-Added/Non-Value-Added Activity Analysis
Cells with non-gray backgrounds are protected and cannot be edited.
DIGITAL RIVER INC.
Instructions
Answers are entered in the cells with gray backgrounds.
ON
Score:
Exercise 27(12)-20
Name:
Solution
Section:
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
a.
Percent of
Total
Activity Cost Process
Receiving claim
Adjusting claim
Paying claim
Total
The activity is the most significant activity in this process.
b.
Average process cost per claim:
Total Activity Cost / Number of Claims = Average Cost per Claim
c.
Activity Cost Activity Cost Activity Cost
Prior to After Savings
Activity Improvement Improvement (Cost)
Receiving claim
Adjusting claim
Paying claim
Total
d.
Average process cost per claim:
Total Activity Cost / Number of Claims = Average Cost per Claim
[Key code here]
Answers are entered in the cells with gray backgrounds.
Key Code:
Instructions
Cells with non-gray backgrounds are protected and cannot be edited.
0%
Exercise 27(12)-22
Name:
Section:
Score:
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
a.
Percent of
Total
Activity Cost Process
Receiving claim 80,000$ 20%
Adjusting claim 240,000 60%
b.
Average process cost per claim:
Total Activity Cost / Number of Claims = Average Cost per Claim
c.
Activity Cost Activity Cost Activity Cost
Prior to After Savings
Activity Improvement Improvement (Cost)
Receiving claim 80,000$ 92,000$ (12,000)$
d.
Average process cost per claim:
Total Activity Cost / Number of Claims = Average Cost per Claim
Exercise 27(12)-22
Name:
Solution
Section:
Score:
Instructions
Answers are entered in the cells with gray backgrounds.
ON
Cells with non-gray backgrounds are protected and cannot be edited.
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
a.
Percent of
Total
Activity Cost Process
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
The two activities that are good candidates for improvement are:
b.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
c.
Activity Cost Activity Cost Activity Cost
Prior to After Savings
Activity Improvement Improvement (Cost)
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
d.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
0%
Exercise 27(12)-23
Name:
Section:
Score:
[Key code here]
Answers are entered in the cells with gray backgrounds.
Key Code:
Instructions
Cells with non-gray backgrounds are protected and cannot be edited.
An asterisk (*) will appear to the right of an incorrect entry.
Enter a zero in cells you would otherwise leave blank.
a.
Percent of
Total
Activity Cost Process
Preparing materials request 36,000$ 9%
Requesting, receiving, and selecting vendor bids 100,000 25%
Preparing purchase order 20,000 5%
The two activities that are good candidates for improvement are:
b.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
20,000 $20.00
c.
Activity Cost Activity Cost Activity Cost
Prior to After Savings
Activity Improvement Improvement (Cost)
Preparing materials request 36,000$ 36,000$ -$
Requesting, receiving, and selecting vendor bids 100,000 25,000 75,000
d.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
Exercise 27(12)-23
Name:
Solution
Section:
Score:
Instructions
Answers are entered in the cells with gray backgrounds.
ON
Cells with non-gray backgrounds are protected and cannot be edited.
$400,000
Correcting reconciliation differences
