Question

A business licensing centre receives application documents, keys in details, checks the information provided on the application, classifies the application according to the type of licence required, confirms payment and then issues and mails the licence. It is currently processing an average of 2,000 licences every 8-hour day. A recent spot check found   7,000 applications that were ‘in-progress’ or waiting to be processed. The sum of all activities that are required to process an application is 20 minutes.

1. What is the work-in-progress (WIP)?   
2. What is the cycle time?
3. Calculate the throughput time.
4. Determine the throughput efficiency of the process.

Answer 1

a. the work-in-progress (WIP) = 7000 applications

b. cycle time = time required to process an application = 20 minutes

c. working time = 8 hour = 8 * 3600 seconds = 28800 seconds

throughput time = working time in seconds / average processing per hour = 28800 / 2000 = 14.4 seconds

d. throughput rate = total average processing per hour / number of working hour = 2000 / 8 = 125 applications per hour

if we consider that 7000 waiting applications are received with 2000 completed applications in same time span of 8 hour then,

throughput efficiency = 100 * output /input = 100 * 2000 / (2000 + 7000) = 22.22%