311_session_5_little

311_session_5_little - Littles Law BUAD311 Operations...

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Little’s Law BUAD311 Operations Management Session 5 1
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2 Objectives Little’s Law A general rule that links various performance measures
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Measurement Capacity Throughput Time Throughput Rate WIP 3
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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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8 Implications of Little’s Law Average number of customers in a
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311_session_5_little - Littles Law BUAD311 Operations...

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