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Author's profile photo Christian Reinboth

Operations Management Basics: Little’s law

Little’s law was named after the American professor John Little (1950s). It defines the relationship between the inventory, the flow rate and the flow time, who have all been already defined previously (see links).

  • inventory = number of flow units in the process
  • flow rate = rate at which flow units are being processed
  • flow time = time a single flow unit spends in the process

Little’s law: inventory (I) = flow Rate (R) * flow Time (T)

Little’s law is important, because it can help us calculate one of the three variables. Once two of the variables are known, the third one is set by the law. This also means that, form the standpoint of an executive, two variables can be picked by management while the third one then falls into place.

These lecture notes were taken during 2013 installment of the MOOC “An Introduction to Operations Management” taught by Prof. Dr. Christian Terwiesch of the Wharton Business School of the University of Pennsylvania at

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