The IRS deterines that it completes 3000 audits per year. The Government Accounting Office reported that the number of projects currently “on the department’s plate’ is 5880. Nevertheless, the deppartment’s head claims that the average time to complete an audit is under six months. Show whether this statement is true or false. Please use the little’s law concept.
Expert Answer
According to Little’s law, L = Wλ,
where,
λ is the throughput rate,
W is the cycle time and,
L is the WIP inventory
Throughput rate of audit, λ = 3000 audits per year
Number of projects, L = 5880
Average time to complete an audit
OR
PayPal Gateway not configured
OR
PayPal Gateway not configured