Business Process Flow

Process Flow Measures

Flow Rate Analysis
Inventory Analysis
Process Flow Measures

Chapter 3 of textbook: “Managing Business Process Flows”, Anupindi, et. al.

 Process Flow Measures
Flow Time T
Affect Process Cost and
Response

Flow Rate R

Inventory I
 Process Flow Measures
Study the flow of a given unit (flow unit)

A flow unit could be

Average
Average
no. of
Average Customer service
no. of flow
A patient
time a at a hospital
flow units
units are
pass request
flow unit within
throughA pound of steel in a
spend in process at
A bank transaction
process
process
per unit
plant any point
of time
time
Flow Time Flow Rate Inventory
 Process Flow Measures
Both inflow and outflow rate fluctuate over time

Inflow Process outflow

When inflow rate exceeds outflow rate,

In the Short-term

inventory increases.
When outflow rate exceeds inflow rate,
inventory decreases.
 Process Flow Measures: Example 1
MBPF is a manufacturer (of pre-fabricated garages) with operational data below. MBPF
tracks inventory at the end of each week of the finished product. Denoting I(t) at the
inventory at the end of each week, so the inventory at the beginning of week 1 is 2200
(I(0)=2200). What is the average inventory.
Week 0 1 2 3 4
Production 800 1100 1000 900
Demand 1200 800 900 1100

Repeat this for remaining weeks. Calculate Averages.

Week 0 1 2 3 4 5 6 7 8 Average
Production 800 1100 1000 900 1200 1100 950 950 1000
Demand 1200 800 900 1100 1300 1300 550 850 1000
Buildup -400 300 100 -200 -100 -200 400 100 0
End. Inventory 2200 1800 2100 2200 2000 1900 1700 2100 2200 2000

Note that we cannot really calculate an R or T in this question; Average inventory is 2000
(during the weeks 1-8)
Little Law can allow to do this
 Stable Process
Stable Processes is a process in which in the long run, the
average inflow rate is the same as the average outflow rate.
Average inflow (or outflow) = Average Flow Rate = Throughput =
Average number of flow units that flow through the process per unit time = R

Average flow time = Average (of the flow times) across all flow units that exit the
process during a specific span of time = T

In a stable process, the average inventory over time = I

Little’s Law
Average Flow Rate = Throughput =R Average inventory over time = I

Average Flow Time = T

I = R*T
Little’s Law
Little’s Law (Material Flow): Example 2
 Little’s Law (Customer Flow): Example 3
At a local deli, people arrive at a rate of 30/hr. On average, there are 8 people waiting in
line to be served. Once a person get to the counter, it takes on average 5 min to be
served. What is the flow unit.
How long does a person wait in line on average? How many people are being
served, on average? How many people are in the deli, on average. How long
does it take a person to go through the process (waiting and service)

Ri = 30/hour R o = 30/hour

Process Time Inventory I = 8 + 30 * (5/60) = 10.5

Work-in-Process
Waiting time = I / R = 8 / 30 hours = 16 minutes
The flow units are people Total Flow Time T = Waiting time + Processing time
= 16 + 5 = 21 minutes
 Little’s Law: Example 3
At a local deli, people arrive at a rate of 30/hr. On average, there are 8 people waiting in line to be served.
Once a person get to the counter, it takes on average 5 min to be served. How long does a person wait in
line on average? How many people are being served, on average? How many people are in the deli, on
average. How long does it take a person to go through the process (waiting and service)

We have to think of the problem in two parts: Waiting in line + Service

Service
Deli
Average inflow (or outflow) = R = 30/hr = 0.5/min (convert to minutes because service rate is in minutes)
Flow Time = T = 5 min People waiting= Inventory = I = 8

Remember flow time given in the question is a service parameter (not a waiting parameter)
Parts Inventory Throughput Rate (R) Flow Time (T)
(/min) (min)
Waiting Line
8 0.5 I/R = 16
Being Served
Total
 Little’s Law: Example 3
At a local deli, people arrive at a rate of 30/hr. On average, there are 8 people waiting in line to be served.
Once a person get to the counter, it takes on average 5 min to be served. How long does a person wait in
line on average? How many people are being served, on average? How many people are in the deli, on
average. How long does it take a person to go through the process (waiting and service)

They are asking for inventory of people being served on average

Average inflow (or outflow) = R = 30/hr = 0.5/min (convert to minutes because service rate is in minutes)

Flow Time = T = 5 min People waiting= Inventory = I = 8

Parts Inventory Throughput Rate (R) Flow Time (T)

(/min) (min)
Waiting Line
8 0.5 I/R = 16
Being Served
R*T = 2.5 0.5 5
Total
 Little’s Law: Example 3
At a local deli, people arrive at a rate of 30/hr. On average, there are 8 people waiting in line to be served.
Once a person get to the counter, it takes on average 5 min to be served. How long does a person wait in
line on average? How many people are being served, on average? How many people are in the deli, on
average. How long does it take a person to go through the process (waiting and service)

Average inflow (or outflow) = R = 30/hr = 0.5/min (convert to minutes because service rate is in minutes)

Flow Time = T = 5 min People waiting= Inventory = I = 8

Parts Inventory Throughput Rate (R) Flow Time (T)

(/min) (min)
Waiting Line
8 0.5 I/R = 16
Being Served
R*T = 2.5 0.5 5
Total 10.5 0.5 21
 Little’s Law (Job Flow): Example 4
An insurance company process 10,000 claims per year. Average processing time is 3
weeks (operates 50 weeks a year). How many claims are being processed at any given
point?

Average inflow (or outflow) = R = 10,000/yr Flow Time (convert weeks to years) = T = 3wks/50(wks/yr) =
0.06 yrs

I = R*T= 10,000*0.06 = 600 claims

 Little’s Law (Cash Flow): Example 5
A manufacturer bills $300 million worth of cellular equipment per year. The average
amount in accounts receivable is $45 million. Determine how much time elapses from
the time a customer is billed to the time the payment is received.

Average inflow (or outflow) = R = $300

Inventory = I = $45 million
million per year

T = I/R= 45/300 = 0.15 years = 1.8 months

 Process Flow Measures
Aside from inventory, throughput, and flow time, Operations
managers are also interested in

Takt Time Inventory Turnover

The reciprocal of throughput: The

maximal time a process can devote Ratio of throughput to average
to a flow unit to keep up with inventory
demand; it’s time between one unit till
next unit (process will output a product = R/I = R/(R*T)
every takt time).
It’s how many times the inventory is
Sets the pace for the process; it’s sold and replaced during a time period
dictate by the longest activity.

Takt Time = 1/R = T/I Inventory Turns = R/I = 1/T

I = RT
 Takt Time: Example 6
A medium-size car manufacturer an average inventory of 150,000 electric cars. The manufacturer
devoted 2 years for the production of the electric cars. Compute the Takt time (assume 8 hours working-
day and 250 operational days per year).
Takt Time = T/I I= 150,000 cars

T= 2 years *250 days/yr. * (8hrs/day)= 4000 hours

Takt Time = T/I = 4000/150,000 = 0.026 hr/car = 96 sec/car

This means, if you are standing just at the end of the production line, you will see a
new electric car coming out every 96 seconds.

It doesn’t mean that a car takes 96 seconds to make.

 Example 7
Each patient arriving at ER (hospital room) needs to register through an initial check-in-
process and then waits to see a doctor. Two alternative outcomes can happen: exit
process with prescription or gets admitted to the hospital. Assume, 55 people arrive at ER
per hour (10% of them admitted to hospital). On average, 7 people are waiting to be
registered (registration takes 2 minutes per patient) and 34 are registered and waiting to
be seen by a doctor. For patients that end up with prescription, they spend on average 5
minutes with the doctor. For those admitted to hospital, they spend 30 minutes on
average with the doctor. On average assuming process is stable answer the following: A)
how long does a patient spends in ER. B) How many patients are being examined by
doctors. C) How many patients are in ER.
I1 = 49.5*(5/60)
= 4.125
I2 = 5.5*(30/60)
= 2.75

R2=5.5 /hr
I=(2/60)*55 I=4.125+2.75
=1.83 = 6.875
R1=49.5 /hr
T=7/55 hour T=34/55 hour
=7.6 min. =37.1 min.
 Example 7
On average assuming process is stable answer the following: A) how long does a patient
spends in ER. B) How many patients are being examined by doctors. C) How many
patients are in ER.

There are two flow units: Prescription patients and admittance ones
Stable system: Average Inflow = Average outflow

Flow rate (Potential admits) = R = 55*0.1 = 5.5/hr

Flow rate (Prescription) = R = 55*0.9 = 49.5/hr

 Example 7a
On average assuming process is stable answer the following: A) how long does a patient
spends in ER. B) How many patients are being examined by doctors. C) How many
patients are in ER.

Calculating
Flow Times

Buffer 1: R = 55/hr (both flow units go through there), I = 7, so that waiting

time = T = I/R = 7/55 hr = 0.127 hours = 7.6 minutes.

Registration: flow time T = 2 min = 2/60 hr. All flow units flow through this
stage. Thus R = 55 / hr. Average inventory  I = RT = 55*2/60 = 1.83 patients.
 Example 7a
On average assuming process is stable answer the following: A) how long does a patient
spends in ER..

Calculating
Flow Times

Buffer 2: R = 55/hr (both flow units go through there), I = 34, so that waiting
time = T = I/R = 34/55 hr = 0.62 hours = 37.1 minutes.

Doctor time: depends on the flow unit:

Potential admits: T = 30 minutes
Prescription patients: T = 5 minutes
 Example 7a
On average assuming process is stable answer the following: : A) how long does a patient
spends in ER..

We find its flow time by adding the activity times on the path
Potential admit, average flow time (buffer 1 + registration + buffer 2
+ doctor) = 7.6 + 2 + 37.1 + 30 = 76.7 minutes

Prescription patient, average flow time (buffer 1 + registration +

buffer 2 + doctor) = 7.6 + 2 + 37.1 + 5 = 51.7 minutes.

On average a patient spends: T = 10% * 76.7 + 90%*51.7 = 54.2 minutes.

 Example 7b
On average assuming process is stable answer the following: B) How many patients are
being examined by doctors. C) How many patients are in ER.

This is the inventory at the doctor’s activity

Potential admits: R = 5.5 patients/hr, T = 30 min = 0.5 hr, thus, I = RT =
5.5/hr*0.5 hr = 2.75 patients
Prescription: R = 49.5 patients/hr, T = 5 min = (5/60) hr, thus I = RT =
49.5*(5/60) = 4.125 patients
Total inventory at the doctor is 2.75 + 4.125 = 6.875 patients.
 Example 7c
On average assuming process is stable answer the following:. C) How many patients are
in ER.

Total inventory in ER = inventory in buffer 1 + inventory in registration +

inventory in buffer 2 + inventory with doctors = 7 + 1.83 + 34 + 6.875 = 49.695
patients.
Example 7
 Example 8
Suppose a triage system has been proposed to example 10 where registration will be kept but
a triage nurse will see them right away (takes about 1 minute) and classify them into simple
prescription or potential admits. Simple prescription patient will move to a regular area, while
potential admits will move to emergency area. On average 20 patients will be waiting to
register (takes 2 minutes on average per patient) and 5 will be waiting to see a triage nurse.
The Simple Prescription area should have 15 patients waiting to be seen (5 minutes with
doctor). In the emergency area, on average one patient should be waiting (then spends 30
minutes of doctor time). Assume 90% of all patients are simple prescription. Assume that the
triage nurse is 100% accurate in classifying patients. On average assuming process is stable
answer the following: A) How many patients will be in the ER. B) how long does a patient
spends in ER. C) How long would a potential admittance spend in the ER. D) calculate takt time
for simple prescription patients.

T=30min
I =1
T=1/5.5*60=10.909min I=5.5*30/60=2.75
T = 2 min T = 1 min
I = 20 I=5
T = 20/55*60 I = 55*2/60 T = 5/55*60 I = 55*1/60 I =15 T = 5 min
= 21.818 min = 1.833 = 5.455 min = 0.917
T=15/49.5*60=18.182min I=49.5*5/60=4.125
 Example 8a
Assume 90% of all patients are simple prescription. Assume that the triage nurse is 100% accurate in
classifying patients. On average assuming process is stable answer the following: A) How many patients will be
in the ER.
Flow rate (Potential admits) = R = 55*0.1 = 5.5/hr

Flow rate (Prescription) = R = 55*0.9 = 49.5/hr

Throughput through ER, R = 55 patients / hour = 0.9167/min.

To get the average duration of time a patient spends in the ER. We need to get
the average inventory. When we don’t have average inventory for the location,
we use the I = RT formula
Average inventory in ER = sum of inventory in all stages = 20 patients [buffer
1] + 0.9167*2 [Registration] + 5 [buffer 2] +1min *0.9167/min [Triage nurse]
+ 1 [buffer 3] + 30*0.9167*0.1 [potential admit] + 15 [buffer 4] +
5*0.9167*0.9 [Simple Prescription] = 50.625
 Example 8b
Assume 90% of all patients are simple prescription. Assume that the triage nurse is 100% accurate in
classifying patients. On average assuming process is stable answer the following: B) how long does a patient
spends in ER.
Throughput through ER, R = 55 patients / hour = 0.9167/min.

Average inventory in ER = sum of

inventory in all stages = 50.625

To get the average duration of time a patient spends in the ER.

Average time spent in the emergency room = I/R = 50.625/0.9167 = 55.23
minutes
 Example 8c
Assume 90% of all patients are simple prescription. Assume that the triage nurse is 100% accurate in classifying
patients. On average assuming process is stable answer the following: C) How long would a potential admittance
spend in the ER Flow
Througput time
Inventory (per min) (min)
Buffer 1 20.000 0.9167 21.817
Registration 1.833 0.9167 2.000
Buffer2 5.000 0.9167 5.454
Triage Nurse 0.917 0.9167 1.000
Buffer 3 1.000 0.09167 10.909
Potential Admit 2.750 0.09167 30.000
Buffer 4 15.000 0.82503 18.181
Simple Prescription 4.125 0.82503 5.000
Total 50.625

For patients that are eventually admitted, average time spent in the
emergency room = time in buffer 1 + registration + buffer 2 + triage nurse +
buffer 3 + doctor (potential admit) = 71.18 minutes
Example 8
 Example 8d
D) calculate the TAKT time for the simple prescription patients.
Takt Time = 1/R = T/I

Total Avg. Inventory = 20 + 1.833 + 5 + 0.917 + 15 + 4.125 = 46.875

Takt Time = (1/d) = (1/R) = Flow Time/Inventory

Takt Time = 0.9 / 46.875 = 0.019 hrs = 1.15 minutes

When calculating TAKT time using R, Need to average the R for that
specific flow unit.
 Example 9
A car rental company at the St. John’s airport follows the market segmentation of short-term
and medium-term rentals. The short-term segment (rents 0.5 weeks on average) and brings
200 rentals at $200 per week while the medium-term segment (rents 2 weeks on average)
brings 100 rentals at $120 per week. Approximately, 20% of the cars returned from the
customers would need repair as a result misuse at a cost of $150 per car (car would stay 2
weeks in the repair shop on average). The remaining cars are filled with gas and cleaned at an
average cost of $5 per car. Assume, there are on average 100 cars waiting to be cleaned;
assuming cars are rented as soon as they are available, answer the following:
a) Identify throughput, inventory, and flow time at each stage.
b) What profit does the company earn per week (assume $40 loss per week per car due to
depreciation)
c) Find the cheapest alternatives of the following:
• Decrease time in repair from 2 weeks to 1 week
• Decrease cost per repair from $150 per car to $120 per car while keeping flow time at repair
at 2 weeks
 Example 9
A car rental company at the St. John’s airport follows the market segmentation of short-term and medium-term rentals. The short-term segment
(rents 0.5 weeks on average) and brings 200 rentals at $200 per week while the medium-term segment (rents 2 weeks on average) brings 100
rentals at $120 per week. Approximately, 20% of the cars returned from the customers would need repair as a result misuse at a cost of $150
per car (car would stay 2 weeks in the repair shop on average). The remaining cars are filled with gas and cleaned at an average cost of $5 per
car. Assume, there are on average 100 cars waiting to be cleaned; assuming cars are rented as soon as they are available, answer the following:
Identify throughput, inventory, and flow time at each stage.
Three stages: Customer, Cleaning, and Repair

Cars going for cleaning = 0.8*300 = 240 /wk

Cars going for repair = 0.2*300 = 60 /wk
Use Little Law
 Example 9
b) What profit does the company earn per week (assume $40 loss per week per car due to
depreciation)

Short-term segment (rents 0.5 weeks on average) and brings 200 rentals at $200 per week.
I= R * T : R = 200, T= 0.5  I = 200 * 0.5 = 100
Medium-term segment (rents 2 weeks on average) brings 100 rentals at $120 per week.
I= R * T : R = 100, T= 2  I = 100 * 2 = 200
 Example 9
b) What profit does the company earn per week (assume $40 loss per week per car due to
depreciation)
 Example
c) Find the cheapest alternatives of the following:
9
• Improvement 1 (I1): Decrease time in repair from 2 weeks to 1 week
• Improvement 2 (I2): Decrease cost per repair from $150 per car to $120 per car while keeping flow time
at repair at 2 weeks
I1: Decreasing flow time in repairs by 1
week will lower the inventory in repairs
from 120 to 60.
This will reduce the number of cars
required by 60 and thus weekly
depreciation by $2,400. (All other revenues
and costs will be unchanged)

I2: Decreasing repair cost per car by $30 lowers weekly repair cost by 60*30 = $1,800.

Decreasing the flow time (I1) in repairs is thus more effective since it results in
larger savings of $2,400.
 Example 10
A famous hotel chain caters to both business and leisure travelers. Given on
average, one third of travelers are leisure and would stay 3.6 nights on
average (twice as long as business travelers, on average).
a) Assuming 135 guests check into the hotel. On average, how many guests
of each type are in the hotel on any given day.
b) How many travelers per month does the hotel turn over its inventory of
guests (assumee 30-day operations per month).
c) If business traveler pays $250 per night and leisure traveler pays $210 per
night, what the average revenue the hotel receives per night per room?
 Example 10
A famous hotel chain caters to both business and leisure travelers. Given on average, one third of
travelers are leisure and would stay 3.6 nights on average (twice as long as business travelers, on average).
a) Assuming 135 guests check into the hotel. On average, how many guests of each type
are in the hotel on any given day.

Two Flow units: Business (Tb, Ib, Rb) and Leisure (TL, IL, RL);
twice as long translates to 2/3

RB =135 × 2/3 = 90 guests/night and TB = 3.6/2 = 1.8 nights → IB = RB TB = 90

* 1.8 = 162 guests
RL =135 × 1/3 = 45 guests/night and TL = 3.6 nights → IL = RL TL = 45*3.6 = 162
guests
 Example 10
A famous hotel chain caters to both business and leisure travelers. Given on average, one third of
travelers are leisure and would stay 3.6 nights on average (twice as long as business travelers, on average).
b) How many timers per month does the hotel turn over its inventory of guests (assume
30 day operations per month).
IB = 162 guests RB = 90 guests/night
IL = 162 guests
RL = 45 guests/night

The total inventory is then IT = 162 +162 = 324

Inventory Turns = RT/IT = (90+45)/324 = 0.4167 turns per day

= 12.5 turns per month.
 Example 10
A famous hotel chain caters to both business and leisure travelers. Given on average, one third of
travelers are leisure and would stay 3.6 nights on average (twice as long as business travelers, on average).
c) If business traveler pays $250 per night and leisure traveler pays $210 per night, what
the average revenue the hotel receives per night per room?

From previous parts of the question, we know

half of guests are leisure (half are business)

Average rate per night that hotel receives

= ½ × 250 + ½ × 210 = $230.
More Exercises
 Example A
JVM sells both new and used vehicles. It sells an average 160 vehicles per month. New vehicles present 60% of
the sales (40% old). The management of JVM would like to keep inventory turns as high as possible. The
management hires Max who is an Operations Manager by trade. Max discovered that the inventory is turning 8
times per year (new and old cars). What’s JVM average inventory for both new and old vehicles? If Max realizes
that turns of new vehicles is 7.2% per year (9.6% for used ones) and the inventory holding cost for a new
vehicle for a month is $175 ($145 for an old one). What are JVM’s average monthly financing costs per vehicle?
If a marketing firm offers a service that would reduce the number of new vehicles sitting in inventory by 20%;
how much should Max be willing to pay for the service?

Inventory Turns = R/I = 1/T R= 160 vehicles per month

I= R/Inventory Turns Inventory turns = 8 /yr

We need to know throughput per year rather than by month Multiply by 12

R = 160 vehicles per month*12 months per year = 1920

= 240 vehicles in inventory on average

 Example A
If Max realizes that turns of new vehicles is 7.2% per year (9.6% for used ones) and the
inventory holding cost for a new vehicle for a month is $175 ($145 for an old one). What are
JVM’s average monthly financing costs per vehicle?

Inew = 0.6 * 160 vehicles/month * 1.667

Tnew = 1/7.2 years = 1.667 months months = 160 new vehicles

Tused = 1/9.6 years = 1.25 months. Iused = 0.4 * 160 vehicles/month * 1.25
months = 80 new vehicles

Total monthly financing costs then 160*$175 + 80*$145 =

28,000 + 11,600 = $39,600/month.

$39,600
𝐶𝑜𝑠𝑡𝑝𝑒𝑟 𝑣𝑒h𝑖𝑐𝑙𝑒𝑎𝑟𝑒 𝑡h𝑒𝑛 ÷(160+80)=$ 165𝑝𝑒𝑟 𝑣𝑒h𝑖𝑐𝑙𝑒𝑝𝑒𝑟 𝑚𝑜𝑛𝑡h
𝑚𝑜𝑛𝑡h
 Example A
If a marketing firm offers a service that would reduce the number of new vehicles sitting in
inventory by 20%; how much should Max be willing to pay for the service?

From Little’s Law, cutting time 20% while holding R

unchanged will reduce inventory by 20%.

From previous part, average monthly financing costs for new

vehicles is 160*$175 = $28,000/month.

A 20% (0.2* $28,000) drop gives $5,600 per month

 Example B
JVM sells both new and used vehicles. It sells an average 160 vehicles per month. New
vehicles present 60% of the sales (40% old). The management hires Jennifer who is an
Accountant. She realized that the turns of new vehicles is 7.2 per year while 9.6 per year
for old vehicles. Holding a new vehicle in inventory cost $175 per month, while it cost
$145 for the old. What are JVM’s average monthlyy financing costs (i.e. inventory costs)?

Inventory turnsnew = 7.2 /yr Hold= $145

I= R/Inventory Turns
Inventory turnsold = 9.6 /yr Hnew= $175
R= 1920 per year

= 80 old vehicles in inventory on average

= 160 new vehicles in inventory on average

 Example B
JVM sells both new and used vehicles. It sells an average 160 vehicles per month. New
vehicles present 60% of the sales (40% old). The management hires Jennifer who is an
Accountant. She realized that the turns of new vehicles is 7.2 per year while 9.6 per year for
old vehicles. Holding a new vehicle in inventory cost $175 per month, while it cost $145 for
the old. What are JVM’s average monthlyy financing costs(i.e. inventory costs) per vehicle
incorporating both new and old cars?
Inventory turnsnew = 7.2 /yr Hold= $145 Iold= 80
I= R/Inventory Turns
Inventory turnsold = 9.6 /yr Hnew= $175 Inew= 160
R= 1920 per year

Inventory Costsold= H*I = $145*80 = $11,600 per month

Inventory Costsnew= H*I = $175*160 = $28,000 per month

Inventory Costs per carnew+old= ($11,600+$28,000)/(160+80) = 165 per

vehicle per month
 Example C
Checking accounts at a local bank carry an average balance of $3,000. The bank turn over its
balance 6 times a year. On average, how many dollars flow through the bank each month?

I=$3,000 Inventory Turns =1/T Inventory Turns = 6

R= ?
R=I/T

T=1/Inventory Turns = 1/6 = 0.167 years = 2 months

R=$3000/2 = $1500 per month

 Example D
A process has a flow rate of 10/hr. Work-in-process (unfinished products) is a major problem.
It’s estimated that 50 units are in the process on average. How many minutes separate the
output of one product from the next?

We are looking Inventory is unnecessary

R= 10/hr
for Takt time in information in this question
minutes
Takt Time=I/R

Takt time =1/10 = 0.1 hrs 0.1(60) = 6 minutes

A unit comes out of the process

every 6 minutes
 Example E
A manufacturer of ergonomically-made work chairs has a weekly demand of 100 chairs. The
workers at the manufacturing plant work two shift per day. Each shift consists of 4 hours (5
day wok week). Compute the takt time in minutes?

Think of demand Inventory is unnecessary

Demand = 100 chairs
as inventory information in this question

Takt Time = T/I = Total time Available/Demand

Total time available=2 shift/day*4 hours/shift *5 days/week= 40 hrs

per week

Takt Time = Total time Available/Demand =

40/100 = 0.4 hrs = 24 minutes
 Example F
Average number of people waiting in line at local bank during lunch hour is estimated to
be 10. During this period, two people leave the bank after concluding their required
service. On average, how long do bank customers wait in line?
Average inventory I = 10 Throughput R = 2 people/min
people (we assume a stable system).

Average flow time T = I / R = 10/2 min = 5 min.

.