IDEAS home Printed from https://ideas.repec.org/p/geg/wpaper/0622.html
   My bibliography  Save this paper

Derivation of the Probability Distribution of WIP velocities

Author

Listed:
  • Michael Louis George

    (Institute of Business Entropy)

Abstract

The Ohno Criterion states that WIP with faster velocities have lower cost than WIP with average slower velocities, in manufacturing cycles per unit time: v=G/W where W= number of pieces of Work In Process Inventory (WIP), and G = rate at which pieces exit from WIP to finished goods per unit time. This velocity is derived from Little’s Law: average cycle time t=W/G units of time per manufacturing cycle. But what is the distribution of velocities around the average?

Suggested Citation

  • Michael Louis George, 2013. "Derivation of the Probability Distribution of WIP velocities," Working Papers 0622, Institute of Business Entropy.
    • Handle: RePEc:geg:wpaper:0622
    as

    Download full text from publisher

    File URL: ftp://ibe.hostedftp.com/~ibe/econ/RePEc/PDF/Derivation%20of%20the%20Probability%20Distribution%20of%20WIP%20velocities%20R.pdf
    File Function: First version, 2013
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Profit; Entropy; Waste; WIP; Little's Law;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • L8 - Industrial Organization - - Industry Studies: Services
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:geg:wpaper:0622. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael L. George (email available below). General contact details of provider: http://www.entropy2718.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.