Question

Bay of Plenty Electricity (BOPE) is an electrical utility company in the Bay of Plenty, New Zealand. BOPE has 21 company cars that the head-office employees share for company business. However, BOPE has to reduce its costs. Assuming that the average number of employees needing a car per work-hour is 4, the average time they need the car is 2.5 hours, and the average utilization of cars is desired to be 83%, how many cars does BOPE need?

Answer 1

As per Little’s Law :

Rate of arrival in the system x Throughput time in the system = Inventory in the system

In the given case,

Rate of Arrival in the system = Employees needing car per hour = R = 4

Throughput time in the system = average time the car is needed = T = 2.5

Inventory in the system = Effective number of cars in the system = I = R X T = 4 X 2.5 = 10

Effective number of cars in the system = 10

Since utilization of car is 83% ( or 0.83 proportion ) ,

Number of cars BOPE need = 10/0.83 = 12.048 ( 12 rounded to nearest whole number )

BOPE NEEDS 12 CARS