New Time Videos (NTV) is a new online video rental service. In the field, it is
ID: 413690 • Letter: N
Question
New Time Videos (NTV) is a new online video rental service. In the field, it is trying to compete by offering its customers access to all of the major new video releases in one business day. That is, if you order a video from NTV, you can expect it in one business day from the time when you placed the order. When you are done with the video, you simply drop it in the prepaid mailing envelope and return it. All videos arrive in a sorting facility located in the Midwest where envelopes with the videos are opened, checked (right video with the right sleeve, no scratches, no cracks, no dirt on the videos), and made ready to be sent out again. As the manager of this facility, your goal is to turn the returned videos around in 6 hours (a shift is 8 hours long). You have the following information: Inventory of videos: 420,000 per shift Throughput: 160,000 per shift
What changes would you recommend to meet the goal of processing a returned video within 6 hours?
We have to increase the throughput from 160000 to ... videos per shift
Explanation / Answer
This problem will be solved using Little’s law which states that :
Rate of arrival / Throughput x Flow time through process = Inventory in the system
Given are :
Desired flow time = 6 hours = 6 / 8 shift = 0.75 shift
Inventory in the system = 420,000
Therefore,
Desired throughput x Desired flow time = Inventory in the system
Or, Desired throughput x 0.75 = 420,000
Or, Desired throughput , 420,000/ 0.75 = 560,000 videos per shift
WE HAVE TO INCREASE DESIRED THROUGHPUT FROM 160,000 VIDEOS PER SHIFT TO 560,000 VIDEOS PER SHIFT
WE HAVE TO INCREASE DESIRED THROUGHPUT FROM 160,000 VIDEOS PER SHIFT TO 560,000 VIDEOS PER SHIFT