Question

00 Kilmer Company has demand for its only product that exceeds its manufacturing capacity. The company provided the following information for the machine whose limited capacity is prohibiting the company from producing and selling additional units points Skipood Actual run time this week Machine time available per week Actual run rate this wook Ideal run rate Defect-free output this week Total output this week (includine defects 7.500 minutes 12.see minutes 6.30 units per minute 7 units per minute 37,800 units 47,250 units Required: 1. & 2. With respect to the company's overall equipment effectiveness, calculate the following (Do not round Intermediate calculations. Round final answers to 2 decimal places and "Units" answers to the nearest whole number.) lo References 1-a Utilization rate 1.0. Miciency rate 1.c. Quality rate 1-d. Overall equipment effectiveness 2-a Ulization loss in units 2-b. Efficiency loss in units 2c. Quality loss in units

Answer 1

1a. Utilization rate can be calculated by

(Actual Run time this week/Machine time available per week)*100

= (7500/12500)*100

=60%

1b Efficiency rate

=(Actual run Rate/ideal run rate)*100

=(6.3/7)*100

=90%

1c Quality Rate

=(Defect free output / Total Output this week)*100

=80%

1d Overall Equipment effectiveness

= (Actual produced units /Maximum units possible to produce in which all are good)*100

=(37800/(12500*7))*100

=(37800/87500)*100

=43.20%

2a) utilization loss in units

(12500-7500)*7

=35000 units

2b)

Efficiency loss in units

=( Ideal units produced per minute for the entire week- Actual units produced per minute for the week)

=(7500*7)-(7500*6.3)

=5250

2c) Quality loss in unit

Total produced -defect free output =47,250-37800 =9450