Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 12

A customer’s order is delivered (received by the customer) on December 1, 2011. This order was placed with the company on September 1, 2011, and received by the manufacturing department on September 15, 2011. Actual production on the order began on October 15, 2011, and was completed November 15, 2011. Based on this information, calculate the following for this order: total customer response time (CRT); order receipt time; manufacturing lead time (processing time); manufacturing wait time; manufacturing time; and delivery time. (Hint: Refer to Exhibit 14.14.) Prepare your answers in days.

Step 1 of 2

Customer response time is actual time gap between the actual placement of order by customer and the time when they receive the goods as per order. The components of customer response time are receipt time, manufacturing lead time and delivery time.