Using Little’s law, calculate which of the following inventories has a better lead time or would result in a quicker turnaround. WIP (Inventory) of 3 and FR of 0.75WIP (Inventory) of 2 or FR of 0.5There is no difference between the two
Question
Using Little’s law, calculate which of the following inventories has a better lead time or would result in a quicker turnaround. WIP (Inventory) of 3 and FR of 0.75WIP (Inventory) of 2 or FR of 0.5There is no difference between the two
Solution
Little's Law is a principle in operations management that states that the average number of items in a queuing system equals the average rate at which items arrive multiplied by the average time an item spends in the system. It is expressed as:
L = λW
where: L = average number of items in the queuing system (inventory), λ = average arrival rate of items to the system (flow rate), W = average time an item spends in the system (lead time).
To calculate the lead time, we rearrange the formula to:
W = L / λ
Let's calculate the lead time for each inventory:
- For the first inventory with WIP of 3 and FR of 0.75, the lead time is:
W = 3 / 0.75 = 4 hours
- For the second inventory with WIP of 2 and FR of 0.5, the lead time is:
W = 2 / 0.5 = 4 hours
So, according to Little's Law, there is no difference in lead time between the two inventories.
Similar Questions
An item has a lead time of six weeks and an average demand of 150 units per week. The safety stock for the item is 300 units. At what point should the item be before an order is placed.
Janice is looking to decrease the manufacturing lead time on a product with many parts. Which is the best action for her to take?Use Lean.Choose a different mode.Use postponement.Hold inventory.
Which of the following statements is correct regarding the use of the first-in first-out (FIFO) method of valuing inventory?Cost of sales for the period is calculated using weighted average cost of the goods acquired.Cost of sales for the period is calculated using the most recent inventory cost per item.Closing inventory consists of the most recently purchased goods.Closing inventory consists of goods purchased earlier in the period.
Which of the following statements is correct regarding the use of the first-in first-out (FIFO) method of valuing inventory? A. Cost of sales for the period is calculated using the most recent inventory cost per item. B. Closing inventory consists of goods purchased earlier in the period. C. Closing inventory consists of the most recently purchased goods. D. Cost of sales for the period is calculated using weighted average cost of the goods acquired.
Risen, Inc. has a beginning inventory of $16 which consists of 2 units at $8 each. It purchased 10 units at $10 each. It sold 5 units for $20 each. Which would result in the higher Gross Profit, FIFO, or LIFO and why?Multiple choice question.FIFO because the newer, more expensive units are assumed to be sold first making cost of goods sold and gross profit higher than LIFOFIFO because the older, less expensive units are assumed to be sold first making Cost of Goods Sold lower and Gross Profit higher than LIFOLIFO because the newer, more expensive units are assumed to be sold first making cost of goods sold and gross profit higher than LIFOLIFO because the older, less expensive units are assumed to be sold first making cost of goods sold lower and gross profit higher than LIFO
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.