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Bay of Plenty Electricity (BOPE) is an electrical utility company in the Bay of Plenty, New...

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?

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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
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