 Demand Rate = Input Rate (Unit/hr)

 Flow Rate = Throughput Rate = Output Rate (Unit/hr) = Min (Demand, Capacity)

 Flow Time
o Total Time of Process
o Time between entry and exit for a unit output
o Also called as Throughput time.
o This is end-to-end time for one unit of output.

 Cycle Time

Individual Cycle time = Cycle time between 2 consecutive exits/completion for individual
process.

Process cycle time = Cycle time between 2 consecutive exits/completion of process as a whole

o Inverse of Throughput Rate/Output rate or Capacity

o Time between 2 consecutive departures.
o It can be at individual task level and at process level.
o NOTE:
 Cycle time of individual process is Individual cycle time
 Cycle time of final output is Cycle time of process.
o Process Cycle Time = Max of all the individual cycle time.

 Capacity (Units/hr)

Maximum output rate (It’s not absolute number but rate)

Capacity = Total Time/ Cycle Time

NOTE:

Flow time can be changed by changing any of the process or making processes to run
parallel. But to change the Capacity, we must improve the bottleneck resource only.

Resource with highest cycle time is bottleneck. This is also the one with lowest capacity in
individual tasks.

 Implied Utilization (IU)

Implied Utilization = Demand / Capacity * 100

o This can be more than 100%

o Resource with highest implied utilization is a bottleneck
 Also, IU = Total Required / Total Available

 Actual Utilization (AU)

Actual Utilization = Flow rate / Capacity * 100

= Min (Demand, Capacity) / Capacity.

o This is always <= 100

 Utilization Profile:
Utilization calculated for all the resources and all the activities entered in the process diagram.

 Little’s Law

Inventory = Flow Rate * Flow Time

 Total Time

Total Time = Wait Time + Process Time

 Waiting Time

W = V(f) * U(f) * T(f)

o V(f) – Variability Factor

o U(f) – Utilization Factor
o T(f) – Time Factor

 Coefficient of Variability

Coefficient of Variability = Standard Deviation (SD) / Mean

Processes for solving any case

1. Identify and Draw the process diagram first.

2. Identify the flow unit
3. Identify resource and its capacity
4. Identify the Input Demand
5. Identify cycle time at each step
6. Calculate IU (Implied Utilization)
 a. IU should be calculated based on Demand always assuming theoretically demand
will always be fulfilled.
b. The process with highest IU is the bottleneck.
7. Try to add resource at bottleneck and see the impact of same.
8. Consider the cost associated with adding the resource and see value obtained by adding
more resources is greater than the loss without it. If so, continue else drop that approach.