Polk,Inc.produces 3,000 hammers each day.The average number of units in work in process is 4,500,having an average cost of $10,000.The annual carrying costs relating to inventory are 15%.
Consultants have determined that the work in process could be reduced by as much as a third by rearranging the factory floor.What is the current throughput time?
A)Eight hours
B)Sixteen hours
C)One day
D)One and one half days

Question

Polk,Inc.produces 3,000 hammers each day.The average number of units in work in process is 4,500,having an average cost of $10,000.The annual carrying costs relating to inventory are 15%. ​
Consultants have determined that the work in process could be reduced by as much as a third by rearranging the factory floor.What is the current throughput time?
A)Eight hours
B)Sixteen hours
C)One day
D)One and one half days

Quizplus · Accepted Answer

The current throughput time is calculated by dividing the average number of units in work in process (4,500) by the daily production rate (3,000 hammers), which equals 1.5 days.

Polk,IncProduces 3,000 Hammers Each Day