Flow Line Model: Problems Solutions

1. A fast-food restaurant processes an average of 5000 kilograms (kg) of hamburgers per week.
Typical inventory of raw meat in cold storage is 2500 kg.
On an average, how long does a kg of meat spend in the cold storage?
Flow boundaries: cold storage inside restaurant
Flow unit: kg of meat
WIP = 2500 Kg, Th = 5000 Kg/week
Using Littles Law
Average Lead time = 2500 kg / 5000 kg per week =0.5 week

2. A branch office of an insurance company processes 10,000 claims per year (50 weeks per
year). Average processing time is 3 weeks. How many claims, on an average, are being processed
at any given point? On an average what is the pace of the line, that is, the time between two
consecutive outputs?
Flow boundaries: branch office
Flow unit: claim
Th = 10000 claims per year = 10000/50 per week = 200 per week
Lead time = 3 weeks
Average inventory WIP = 10000/50 per week * 3 weeks = 600 claims
Time between two consecutive outputs = cycle time = (1/Th) = (1/200) week.

3. A manufacturer sells $300 million worth of cellular equipment per year. The average amount
in account receivable is $45 million. On an average, how much time elapses from the time a
customer is billed to the time payment is received?
Process boundaries: accounts-receivable dept
Flow unit: a dollar
Throughput: 300 million / year
Average WIP = 45 million
Average lead time = 45 / 300 = 0.15 years = 1.8 months

4. Let us imagine a simple production line, as shown, for making a table. An order flows in to
workstation A where a worker takes 3 hours to create table legs. The order and table legs then
move on to workstation B where a worker takes 5 hours to create a table top. The order, legs, and
top then moves to Workstation C where a worker takes 2 hours to assemble the table. Each
workstation has only one worker devoted to the assigned activity. One order arrives every 7.5
hours.
[IMPORTANT: units in the following figure should be Time Units: hour. In each of the three
boxes, mins should be hour.]

What are the performance measures: Min leadtime, Max Th and cycle time corresponding to
Max Th, Actual Th, WIP and resource utilization at each workstation?
Min leadtime=3+5+2=10 hours
Station capacities: A=1/3 =0.33 per hr; B: 1/5 =0.2 per hr; C: 1/2 =0.5 per hr;
Resource at station B is the bottleneck.
Max Th = min of station capacities = 0.2 per hr;
Cycle time corresponding to max th= 1/ max Th = 1/0.2 hr = 5 hours
Actual Th = arrival rate = 1/7.5 = 0.133 per hr
Cycle time corresponding to actual th= 1/ actual Th = 7.5 hours
WIP = actual Th * Leadtime = 0.133 per hr *10 hr = 1.33 orders
Utilization of resource at station A: 0.133/0.33=40.3%, B:0.133/0.2=66.5%,
C: 0.133/0.5=26.6%
5. If there are multiple types of units flowing through the process, analysis is slightly more
involved. Here is an example: An employment verification agency receives resumes from
consulting firms and law firms with the request to validate information provided by their job
candidates. The process flow diagram below describes the process of handling the resumes. The
three customer types share the first step and the last step in the process but differ with respect to
intermediate steps. The capacity of the process crucially depends on the product mix. The
demand is a total of 180 applications a day of which there are: 30 for consulting positions, 110
for staff and 40 for internship positions. Assume that the working day is 10 hours.

Other data:
Resource-type

Activity Time
(min./appli.)

File
3
Contact clients/supers
20
Contact employers
15
Benchmark grades
8
Confirmation letters
2
Which resource-type is the bottleneck?

# of
workers

1
2
3
2
1

To handle such a case, the main idea is to think in terms of a typical unit of flow where this
typical unit is an application for consulting with probability 30/180, for staff with a probability
of 110/180 and for internship with probability of 40/180. Given a 10 hour day, there are, on
average per hour, 3 consulting, 11 staff and 4 intern applications adding up to typical 18
applications per hour.
Now, we will determine the service times of this typical flow-unit for each resource-type. This
is done by simply taking a weighted average of times of different customer types. In this setting,
each activity is assigned to one resource-type so we can refer to both by the same name. For
example resource-type filing clerk performs only one activity file. We can refer to both by
file. In other settings, it is possible that one resource-type performs multiple activities. In such
a case, the service time for this resource-type will be the sum of average times for all activities.
File: since all types go through this step, the typical unit takes [(3/18)*3+(11/18)*3+(4/18)*3]
=3 minutes and the capacity per hour is 60 minutes/3 min. = 20 per hour, giving a utilization of
18/20=90%.
Contact clients/supers: Since only consulting applications go through this step, we can consider
the time for staff and intern applications to be zero. The typical unit time is
[(3/18)*20+(11/18)*0+(4/18)*0]=60/18. Because there are two resources, the capacity per hour
is 2*[60 minutes/(60/18)] min. = 36 per hour, giving a utilization of 18/36=50%.
Contact employers: The typical unit time is [(3/18)*5+(11/18)*5+(4/18)*0]=70/18. The
capacity per hour is 60 minutes/(70/18) min. = 108/7 per hour, giving a utilization of 18/
(108/7)=116.66%. Well, more than 100% utilization means that they got to run some overtime.

Grade/School analysis: The typical unit time is [(3/18)*0+(11/18)*0+(4/18)*8]=32/18=1.78

min. The capacity per hour is 2*[ 60 minutes/(32/18)] min. = 1080/16 per hour = 67.5 per hour,
giving a utilization of 18/(1080/16)=26.66%.
Confirmation letter: The typical unit time is [(3/18)*2+(11/18)*2+(4/18)*2]=2 min. The
capacity per hour is 60 minutes/2 min. = 30 per hour, giving a utilization of 18/30=60%.
Clearly, Contact employers is the bottleneck. Note that this approach would also work in the
more general case where each different type of unit would take different time at each step.
Suppose, just as an example, the resource devoted to confirmation letter leaves. We ask the
resource-type working on activity grades to also work on activity confirmation letters. The
service time for this resource-type is now the sum of two activity times (32/18) min + 2 min =
3.78 min and the revised capacity for this resource-type is 2*[60/3.78]=31.75 per hour.