(Activity analysis) The Raleigh plant manager of Allentown Corp. has noticed the plant frequently changes the schedule on its production line. He has gathered the following information on the activities, estimated times, and average costs required for a single schedule change.
Review impact of orders
30 min.–2 hrs.
15 min.–24 hrs.
Reschedule production orders
15 min.–1 hr.
Stop production and change over
10 min.–3 hrs.
Return and locate material (excess inventory)
20 min.–6 hrs.
Generate new production paperwork
15 min.–4 hrs.
Change purchasing schedule
10 min.–8 hrs.
Collect paperwork from the floor
Review new line schedule
15 min.–30 min.
3 hrs.–10 hrs.
a. Which of these, if any, are value-added activities?
b. What is the cost driver in this situation?
c. How can the cost driver be controlled and the NVA activities eliminated?