ssume an operating speed rate of 84%. If 60 units are produced at 3 minutes/unit in 4 hours, what is the performance efficiency of the work unit?

OPTIONS

• 0.85
• 0.63
• 0.75
• 0.60

ANSWER

0.63

EXPLANATION

For this problem, there are 2 calculations to be done: 1. Net Operating Rate = (Processed Amount X Actual Cycle Time) / Operating Time = 60 X 3 / 240 = 0.75 or 75% 2. Performance Efficiency = Operating Speed Rate X Net Operating Rate Performance efficiency = 0.84 X 0.75 = 0.63