When a business can maximize the product or service delivered within a given period of time, it has reached maximum throughput. This is the basis of maximizing earnings and therefore profits for a company. This article will examine the definition more thoroughly and illustrate to the reader how to identify issues associated with the throughput for your business.
Little’s Law is defined in terms of throughput in units per time period. The formula is inventory equals throughput times the flow time. The most common example is the group line at the bank which helps to average the flow time per bank patron.