Compute Lead Time

Isaacson Dental Inc. is considering a new lean product cell. The present manufacturing approach produces a product in four separate steps. The production batch sizes are 50 units. The process time for each step is as follows:
Line Item Description Time
Process Step 1 6 minutes
Process Step 2 12 minutes
Process Step 3 9 minutes
Process Step 4 3 minutes

The time required to move each batch between steps is 6 minutes. In addition, the time to move raw materials to Process Step 1 is also 6 minutes, and the time to move completed units from Process Step 4 to finished goods inventory is 6 minutes.

The new lean layout will allow the company to reduce the batch sizes from 50 units to 2 units. The time required to move each batch between steps and the inventory locations will be reduced to 1 minute. The processing time in each step will stay the same.

Determine the value-added, non-value-added, and total lead times, and the value-added ratio under the (a) present and (b) proposed production approaches. If required, round percentages to one decimal place.
Line Item Description Present Approach Proposed Approach
Value-added time
Non-value-added time
Total lead time
Value-added ratio (as a percent)