311_session_5_Little's_law

311_session_5_Little's_law - Little's Law BUAD311...

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Little’s Law BUAD311 Operations Management Session 5 1
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Last Class Kristen Cookie Bottleneck resource Capacity calculation Bottleneck shifting Capacity Planning Divide and round up Impact of variability/uncertainty 2
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3 Objectives Throughput Time Throughput Rate WIP Little’s Law A general rule that links various performance measures
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Throughput Rate Throughput Time WIP 4 What is the relationship? Time WIP Throughput rate is two  unit per unit of time
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5 Throughput Time = WIP / Throughput Rate Little’s Law
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6 Little’s Law Example: Bank Teller (Average) WIP: 6 customers (Average) Throughput rate: 12 customers per hour (Average) Throughput time: 6/12 = 0.5 A customer spends (on average) 0.5 hours in the bank Does this mean each customer spends 0.5 hours in the bank? How many customers arrive on average in an hour?
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7 Implications of Little’s Law Given average WIP and Throughput Rate, we can calculate Throughput Time Relatively easy to measure WIP and Throughput Rate Keeping WIP fixed, reducing Throughput Time results in a higher Throughput Rate.
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311_session_5_Little's_law - Little's Law BUAD311...

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