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Little's Law   

The Relationship Between Throughput Time and Inventory 

Little's Law

Little's Law states that average throughput time through a production system is directly proportional to average inventory. Think of a tank of water with a constant inflow and a constant, identical outflow.

In this analogy, the input spigot represents orders coming to the factory. The outlet represents finished product. Water in the tank represents WIP inventory. Average throughput or dwell time in the tank is 100 minutes. If we lower the level to 100 gallons and maintain the same flow, throughput time is only 10 minutes.

Conditions For Application

  • If there are multiple products and variability in routings or work times among those products, Little's Law holds for long-term averages but not, necessarily for individual pieces or orders.
  • Units of measure must be consistent. For example, if inventory is measured in $$ and flow time is measured in days then the throughput rate is in $/day.

Little's Law Illustration

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