Throughput Time
Throughput time is the time required to convert raw materials into finished goods. This also applies to the processing of raw materials into a component or sub-assembly. the time is accounted right from when it first enters manufacturing until it exits manufacturing.
Throughput time includes the following:
- Processing time: Time required to transform raw materials into finished goods.
- Inspection time: Time required to inspect raw materials, work-in-process (WIP), and finished goods at different stages of production process.
- Move time: Time spent to move items in and out of the manufacturing area and between workstations in the production area.
- Queue time: Waiting time prior to the processing, inspection & moving activities.
- Throughput time mainly focuses on reducing for a manufacturing process to complete. The amount of throughput flowing through a system can be increased and thus increase profitability.
Throughput = Net sales - Totally Variable Expenses
Throughput Time = Process Time + Move Time + Inspection Time + Queue Time
(Part of Education Series: Operations Management)Also See:
Comments
Post a Comment
Suggestions for new topics are most welcome. Do let me know.