Throughput time for a process is synonymous with Average Lead Time and is calculated by dividing the number of items within the process (work-in-process inventory) by the number of units that move through the process in a given time period (throughput). For example:
- If you generate 10 purchase orders on day 1 and on day 11, you receive all units ordered, you have 10 units delivered in 10 days. 10 days x 10 units = 100.
- 100/10 units received = 10 days Average Lead Time or Throughput Time.
For more information, see: Little’s Law« Back to Glossary Index