Little's Law Applications in Operations - In Class Tutorial 1.Fantastic Fortune Private limited (FFPL) is a leading manufacturer in Mobile phones Industry. Currently they only produce one model, which is called Model A. They produce 300 phones/minute and they operate 24hrs/day and 364 days in a year ( 52 weeks) Following are some important numbers about FFPL from their annual report. Model Type Average time to produce One phone -Hrs Model A12 Financial performance of last Year$ Annual Sales529,200,000 Cost of Goods Sold370,440,000 Accounts receivable88,200,000 Inventory92,610,000 Net Profit Margin52,920,000 Questions: a)What is the Inventory in number of phones, on average at any given time inside FFPL? b)On Average, how long does it take FFPL to collect the money from their customer after delivering the phones they ordered? 2.A popular supermarket Chain wanted to understand the average amount of time customers spend in their stores and in a check out line. One of the ways of determining this time is to observe the time a customer enters and exits the store and get an average. Same observation can be made for check-out lines. Although it's possible, it very difficult to observe the entry and exit times of every individual customer. Is there another way to estimate these times? Over the last 2 weeks the following data has been collected in one of their main outlets which is very representative of other outlets. It has 8 check-out counters.
Average number of customers entering the store -à400/hr Average number of customers inside the storeà180 % of customers who do not make any purchase -à6% since they are put off the waiting lines at the check out counters Average number of customers in the check-out lineà40 With this data the supermarket Manager approaches you since you are an awesome consultant in Process improvements. He wants you to find out, i)How much time on average a customer spends in the store ? ii)How much of that total time is spent in waiting at the check out counter on average? iii)What will be the impact of increasing the check out counters from 8 to 10 on the 4 data they provided to you? A qualitative answer is sufficient no calculations are needed 3.Exercise little - Question 5