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Using Little's Law, one can calculate throughput with the equation: = where: I is the number of units contained within the system, inventory; T is the time it takes for all the inventory to go through the process, flow time; R is the rate at which the process is delivering throughput, flow rate or throughput.
In mathematical queueing theory, Little's law (also result, theorem, lemma, or formula [1] [2]) is a theorem by John Little which states that the long-term average number L of customers in a stationary system is equal to the long-term average effective arrival rate λ multiplied by the average time W that a customer spends in the system ...
Throughput Accounting uses three measures of income and expense: The chart illustrates a typical throughput structure of income (sales) and expenses (TVC and OE). T=Sales less TVC and NP=T less OE. Throughput (T) is the rate at which the system produces "goal units".
In business and for engineering economics in both industrial engineering and civil engineering practice, the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects. [1]
The same example using first pass yield (FPY) would take into account rework: (# units leaving process A as good parts with no rework) / (# units put into the process) 100 units enter process A, 5 were reworked, and 90 leave as good parts. The FPY for process A is (90-5)/100 = 85/100 = 0.8500
The Solow residual is a number describing empirical productivity growth in an economy from year to year and decade to decade. Robert Solow, the Nobel Memorial Prize in Economic Sciences-winning economist, defined rising productivity as rising output with constant capital and labor input.
Given an arrival rate λ, a dropout rate σ, and a departure rate μ, length of the queue L is defined as: L = λ − σ μ {\displaystyle L={\frac {\lambda -\sigma }{\mu }}} . Assuming an exponential distribution for the rates, the waiting time W can be defined as the proportion of arrivals that are served.
In some literature, [citation needed] the term "economic manufacturing quantity" model (EMQ) is used for "economic production quantity" model (EPQ). Similar to the EOQ model, EPQ is a single product lot scheduling method. A multiproduct extension to these models is called product cycling problem.