Model Answer
0 min readIntroduction
In Operations Management, efficient workflow is paramount for productivity and cost control. A key metric in assessing workflow efficiency is Work-In-Process (WIP), representing the partially completed goods within a system. WIP levels are directly influenced by processing time and throughput. Little’s Law, a fundamental principle in queuing theory, establishes a direct relationship between these three variables. This answer will analyze whether reducing processing time in stage S3 will lead to a reduction in WIP, explaining the underlying principles and assumptions.
Understanding the Relationship: Little’s Law
Little’s Law states: WIP = Throughput x Lead Time. Where:
- WIP (Work-In-Process): The average number of items currently being processed in the system.
- Throughput: The average rate at which items are completed (e.g., units per hour).
- Lead Time: The average time it takes for an item to move through the entire system.
Impact of Reduced Processing Time in S3
The question focuses on a reduction in processing time specifically at stage S3. To determine the impact on WIP, we need to consider the assumptions regarding throughput.
Scenario 1: Throughput Remains Constant
If the throughput (the rate at which finished goods are produced) remains constant, a reduction in processing time at S3 will directly lead to a reduction in the overall lead time. Since WIP = Throughput x Lead Time, and Throughput is constant, a decrease in Lead Time will inevitably result in a decrease in WIP. This is because the system can process items faster, reducing the accumulation of partially completed goods.
Scenario 2: Throughput Increases
If the reduction in processing time at S3 allows for an increase in throughput (the system can now produce more finished goods per unit of time), the impact on WIP is less certain. WIP could increase, decrease, or remain the same depending on the magnitude of the throughput increase relative to the lead time decrease. However, the question doesn’t specify any change in throughput, so we assume it remains constant.
Illustrative Example
Let’s assume:
- Initial Processing Time in S3: 10 minutes
- Throughput: 6 units per hour (360 minutes)
- Initial Lead Time: 60 minutes
- Initial WIP: 6 units/hour * 60 minutes = 360 units
Now, if the processing time in S3 is reduced to 8 minutes, and throughput remains at 6 units per hour, the lead time will decrease (assuming S3 was a bottleneck). Let’s assume the new lead time is 50 minutes. The new WIP will be: 6 units/hour * 50 minutes = 300 units. This demonstrates a reduction in WIP.
Bottleneck Analysis
It’s important to note that the impact of reducing processing time is most significant when S3 is a bottleneck in the process. A bottleneck is the stage that limits the overall throughput of the system. If S3 isn’t a bottleneck, reducing its processing time might not have a substantial impact on overall lead time and WIP.
Conclusion
In conclusion, if the processing time in S3 is reduced to 8 minutes while maintaining a constant throughput, there will be a reduction in work in process. This is a direct consequence of Little’s Law, which dictates an inverse relationship between lead time and WIP when throughput is held constant. The magnitude of the reduction will depend on the extent to which S3 impacts the overall lead time, particularly if it is a bottleneck in the production process. Optimizing processing times at bottleneck stages is a crucial strategy for improving operational efficiency and reducing inventory costs.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.