34. And so, you basically, out of each guest
you're making an extra two dollars per day.
And, since there are gonna be 1,200 beds, and out of each skiers for the average
day, you're gonna make an average two dollars you're gonna get the same $2,400
per day that we computed below. Alright, ready for the next question.
This question is called Summer Sweets, and it's about a small gelato store that is
having a revenue here of $4.3 million, and cost of $2.6 million dollars.
The first question asks you to compute the inventory turns, and the second question
asks you to compute the amount of inventory that just needed to run this
business. Take some time for yourself and then we'll
tackle this together. Alright, for the first question remember
that the inventory terms. Is driven by One over the flow time T.
So, if the inventory spends 30 days in the process, we speak of one turn a month or
twelve turns a year. Now, in this case, we notice that The
inventory only stays four one-half days in the system.
And so the inventory turns, one over T, is simply one over 4.5.
Now, we have to be careful here with the, the units because if 4.5 is expressed in
days. If we want to express this in terms of
yearly turns, then we have to multiply 365, and we're going to see that we're
turning, per year, we're turning this inventory 81.4 times.
The second question asked you to compute the inventory, and remember Based off
Little's Law, Which is really at the heart of all this inventory turns calculation, I
equals r times T. Now in most settings that I have discussed
in the lecture, for those three variables I've given you inventory.
And I've given you the flow rate. So when you look at the flow rate, just as
a reminder, always please look at cogs. Do not use revenue for the flow rates.
So, as I said, typically, I've been giving you the inventory.
Of course, companies kind of typically know how much inventory they have in their
system. This question here has given us a, The
days of supply or, as we computed in the first question, the inventory turns.
And so, you know, it's the same equation, it's just, you know, you have two
different variables this time that you know already.
And you're solving this time for I instead of in the other settings we tackled this
question we solved for T. Is this practically meaningful?
I thought on situations like this where you have R and T, those tend to be
situations where you are planning for a business expansion or even an entirely new
business. And those are situations where you want to
figure out I to compute the working capital.
In an existing ongoing business, chances are you know your I.
So is this question realistic? Yes typically if this is a chain that is
growing and is making predictions for capital needs in the future.
So I equals R times T, we've said that the R here, the flow of money through the
organizations cost is 200. $2,600,000 per year.
We said that T, If we wanna express this in years now, it's 4.5 divided by 365.
And then we gonna get, if we multiply this all out, we gonna get I and inventory of
32,000 And, $54. Alright, the last question in this module
review is about the Department of Motor Vehicles.
You have In the Department of Motor Vehicle in my example here, you have 400
people who are arriving and want to have an application.
Make an application, excuse me, make an application for a driver's license.
About one percent of them fail because of cannot f-, they're not able to produce an
appropriate identification. Fifteen percent then go on and fail the
written exam. And 30 percent then fail in the driving
test. And, if you buy me a drink at some point,
I'm happy to share with you my experience In the driver's license test in California
some long time ago. Anyway take your time.
Read the question. As you can expect, you're asked to find
the bottleneck in this question. Take your time and then press on play
again whenever you're ready. Alright.
The, the way we wanna start this question is just drawing the process flow diagram.
The first step here, is the, you know? The identification of the, customer.
And some people fail, right? One percent fail to, do this
appropriately. The question says, we have these 400
people a day arriving. So 400 flown in.
One percent failing, so there's f-, four people a day that, that fail to do this
and that leaves 396 who are arriving at the second step, the written examination.
So the second step then, examination, we said you know, 85 percent are, are, are
able to do the written exam, and fifteen%, fifteen percent of those 396 are failing.
So 396 times fifteen%, if my math is correct, is 59.4, which then leaves us
with 300. And 36.6 people who actually wanna take or
allowed to take the road exam and from those we said 30 percent would fail and so
that's about 101 a 100.98 to be exact that are failing this and from those.
Excuse me, from those, then 235.62 will be passing the exam and they would be good to
go. And so that really gives us the answer to
the first question. If there's unlimited capacity, we are able
to serve all these demands, all of these 400 customers and just because of the
attrition loss, this will give an output of 235.62 applications per day.
Now that is a big if, right? That's assuming that we have unlimited
capacity. And so that's most likely not gonna be the
case. And so we wanna do a separate calculation
for the case where we wanna find the bottom x.
So let's do this one next. Alright.
How do we figure out the station that is the bottleneck in this case here?
Well, guess what? There are exactly three candidates who
could be the bottleneck. The one is the identity check, the,