**Little's Law:**An electronics retailer tries to keep inventory levels low so that they can avoid obsolescence. Their target is to have items stay in inventory for, on average, 3 weeks. On average, they get $1,000,000 in sales revenue each week. How much money would they have tied up in inventory?---**Explanation:**Using Little's Law, which is expressed as:\[ \text{Inventory} = \text{Throughput} \times \text{Flow Time} \]- **Throughput** is $1,000,000 per week.- **Flow Time** is 3 weeks.The inventory tied up would be:\[ \text{Inventory} = \$1,000,000 \times 3 = \$3,000,000 \]Therefore, the retailer would have $3,000,000 tied up in inventory.

Inventory refers to the stock of current assets of a company that is kept by a producer to sell them…

Little's Law: An electronics retailer tries to keep inventory levels low so that they can avoid obsolescence. Their target is to have items stay in inventory for, on average, 3 weeks. On average, they get $1,000,000 in sales revenue each week. How much money would they have tied up in inventory?

Little's Law: An electronics retailer tries to keep inventory levels low so that they can avoid obsolescence. Their target is to have items stay in inventory for, on average, 3 weeks. On average, they get $1,000,000 in sales revenue each week. How much money would they have tied up in inventory?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.

Question

**Little's Law:**

An electronics retailer tries to keep inventory levels low so that they can avoid obsolescence. Their target is to have items stay in inventory for, on average, 3 weeks. On average, they get $1,000,000 in sales revenue each week. How much money would they have tied up in inventory?

---

**Explanation:**

Using Little's Law, which is expressed as:

\[ \text{Inventory} = \text{Throughput} \times \text{Flow Time} \]

- **Throughput** is $1,000,000 per week.
- **Flow Time** is 3 weeks.

The inventory tied up would be:

\[ \text{Inventory} = \$1,000,000 \times 3 = \$3,000,000 \]

Therefore, the retailer would have $3,000,000 tied up in inventory.

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