COMM 204 Lecture 2: 2 Little’s Law
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Flow time (or throughput time): length of time a unit spends in the system. Capacity rate: max rate at which units can flow through a process. Resource with the slowest capacity rate in a process. Determines the capacity rate of a process. Throughput rate or flow rate: actual output rate. Throughput rate: the lower of capacity rate & arrival rate (input rate) Long-run avg input rate < long-run avg capacity rate. Long-run avg throughput rate = long-run avg input rate. Short-run avg input rate >= short-run avg capacity rate. Little"s law (average) inventory = (average) throughput rate * (average) flow time. = [cost of goods sold] / [average inventory investment] = [$ value of cost of output] / [$ value of average inventory]