20 AN MCE OF LESS THAN 1 MEANS THAT THE TIGHT, THEN THE ONLY WAY TO...

10-20 An MCE of less than 1 means that the

tight, then the only way to generate favorable

production process includes non-value-added

labor efficiency variances is for every work-

time. An MCE of 0.40, for example, means that

station to produce at capacity. However, the

40% of throughput time consists of actual proc-

essing, and that the other 60% consists of mov-

output of the entire system is limited by the ca-

pacity of the bottleneck. If workstations before

ing, inspection, and other non-value-added ac-

tivities.

the bottleneck in the production process pro-

duce at capacity, the bottleneck will be unable to

process all of the work in process. In general, if