Table 2.3 Table 2.4Patient Number Arrival Time Departure Time Flow Time

1 7:35 8:50 1:15 Kmart Corp.2 7:45 10:05 2:20 Inventory3 8:10 10:10 2:00 Income4 9:30 11:15 1:45 Total operating revenue5 10:15 10:30 0:15 Cost of goods sold6 10:30 13:35 3:05 Net income7 11:05 13:15 2:108 12:35 15:05 2:30 Wal-Mart Stores Inc.9 14:30 18:10 3:40 Inventory

10 14:35 15:45 1:10 Income11 14:40 17:20 2:40 Net sales

Average 2:04:32 Total operating revenue Cost of goods sold

Page 2-10 0.933333333 56 Net incomePage 2-13 15

Kmart 2002 Flow RateKmart 1998 Flow RateWal-Mart 2002 Flow Rate

1/28/1998 1/27/1999 1/26/2000 1/31/2001 1/29/2002

6367 6536 6350 5796 4825

33674 35925 37028 36151 3076226319 28161 29732 29853 26258

518 364 -268 -2446 -3219

16497 17076 19793 21644 22749

117958 137634 165013 191329 217799119299 139208 166809 193295 219812

93438 108725 129664 150255 1715623526 4430 5377 6295 6671

0.1837535 67.070036 5.4420725 3.67507050.2419165 88.2995170.1325993 48.398742 7.5415183

Inventory 400Cost of Goods Sold 26442Flow Time (in years) 0.015127Inventory Turnover 66.105Per-Unit Inventory Cost Percentage 0.605098

Throughput (in passengers per hour) 255Inventory 35Flow Time (in hours) 0.137255Flow Time (in minutes) 8.235294

Sales 60000000Inventory 20000000

Part ASelling Price 2000COGS per Unit 1000Units Sold 30000Total COGS 30000000Flow Time (in years) 0.666667Inventory Turns 1.5

Part BPer-Unit Inventory Cost Percentage 16.66667Per-Unit Inventory Cost (in $) 166.6667

Revenue 100000000Inventory 5000000COGS 50000000

Part AFlow Time (in years) 0.1Inventory Turnover 10

Part BPer-Unit Inventory Cost Percentage 4Per-Unit Inventory Cost (in $) 1.2

Inventory 1200Flow Time (in days) 10

Part AThroughput (in skiers per day) 120

Part BNew Throughput 240On an average day, there are 1200 skiers, and 240 of those are spending their first night in the hotel.In 2002/03 there were still an average of 1200 skiers each day, but only 120 of those were spending their first night in the hotel.

Average Daily Revenue (2002/03) 38400Average Daily Revenue (2003/04) 40800Percentage Change from 2002/03 to 2003/04 5.88%

In 2002/03 there were still an average of 1200 skiers each day, but only 120 of those were spending their first night in the hotel.

Speed (in MPH) 60Inventory 24Flow time for 1/4-mile stretch of highway (in hrs) 0.004167Throughput (in cars per hour on highway) 5760Throughput (in cars per minute on highway) 96

Flow Time (in minutes) 12Flow Time (in hours) 0.2Throughput (in units per hour) 4000

Required Inventory (oven size) 800

Associates 200Managers 60Partners 20

Associate flow time (in years) 4Manager flow time (in years) 10Partner flow time (in years) 20

Part AAssociate throughput 50

Part BProbability that new associate will become partner 0.1Odds that new associate will become partner 10 to 1

Costco Wal-MartInventories ($MM) 3643 29447Sales (net $MM) 48106 286103COGS ($MM) 41651 215493

Part AFlow Time (in days) 31.92468 49.87705

Part BPer-Unit Inventory Cost Percentage 2.623947 4.099484Per-Unit Inventory Cost (in $) 0.131197 0.204974

Difference between inventory cost for $5 COGS item for the two companies: 0.073777

McDonald's Wendy'sInventory 129.4 54.4Revenue 17140.5 3148.9Cost of Goods Sold 11943.7 1634.6Gross Profit 5196.8 1514.4

Part AFlow Time (in years) 0.01083416 0.03328Inventory Turnover 92.3006182 30.04779

Part BPer-Unit Inventory Cost Percentage 0.32502491 0.998409Per-Unit Inventory Cost (in $) 0.00975075 0.029952

Difference between Wendy's and McDonald's inventory cost per value meal (in $): 0.020202