If a company’s warehouse holds 90,000 units in inventory and sells 900 units daily, according to...

If a company’s warehouse holds 90,000 units in inventory and sells 900 units daily, according to the Little’s law the average unit will spend how many days in inventory?

Expert Solution

According to the little's law, number of items in the system (L) is equal to the multiplication of the rate of item entering and leaving in the system (A), and average time spent in the system (W).

Formula is: L = A x W

Now, in given question W= L/A

We know that L=90,000 units.

A= 900 units/day.

Therefore W= 90000/900= 100 days.

Hence, the average unit will spend 100 days in inventory.

keosha answered 2 years ago

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