Lesson 03 – Logistics Indicators

Question 1

Define throughput

Answer 1

-It is the rate at which entities are processed by the system.
It can be mesured in cost of goods sold in a year.

Question 2

Work in process (WIP)

Answer 2

number of entities in system, which can be measured in physical (eg. parts, people) or financial units.

Question 3

Cycle time

Answer 3

The time it takes an entity to traverse (Go through) the system including any rework, restarts due to yield loss

Question 4

Capacity

Answer 4

The maximum average rate at which entities can flow through system, and therefore a function of capacities of each process in system.

Question 5

Please give two examples of detractors and explain how they can affect the capacity

Answer 5

Equipment availability

Operator unavailability

Set-up

Rework

base capancity - Detractors = Capacity

Question 6

Please define a bottleneck

Answer 6

• Process that constraints capacity of overall system
• Department, facility, machine, or resource already working at its full capacity and which, therefore, cannot handle any additional demand placed on it
• is the process with the highest utilization.

Question 7

What is utilization?

Answer 7

• Proportion of available time that a piece of equipment or system is operating
• Action of making practical and effective use of something

Question 8

100% of utilization cannot be sustainable in the long run. Why ?

Answer 8

-Output of system cannot equal or exceed its capacity

Question 9

Explain why the cycle time tends to infinite when utilization approaches 100%?

Answer 9

-cycle time increases with utilization and it does it so sharply as utilization approaches 100%