Using Little's Law, which shows the average number of items in a system (I) is the product of the average arrival rate to the system (R) and the average length of the time an item stays in the system (T).
I = T X R Where I = Ave # of things in a system (inventory)
Where T = Ave throughput time (processing + waiting time)
Where R= Ave flow rate of the process
Question: Suppose a bank clears checks drawn on customers' checking accounts by using the following process: Receive checks ->Sort checks by bank->ship checks to the check clearing house.
a. If the capacity for receiving check is 1000 checks per hour, for sorting checks is 800 checks per hour, and for shipping checks is 12000 per hour, what is the capacity of the system to process checks?
b. If the flow rate is an average of 600 checks per hour and there are an average of 200 checks in the system, what is the average throughput time of checks?
c. What could be done to decrease the throughput time?