Statewide Insurers receives 600 applications per month. Currently, there are 60 applications in the Reception area and 140 applications with the Underwriting team. What is the average flow time for the Underwriting process? Assume that there are 20 working days per month.
A) 4.29 days
B) 7 days
C) 4.67 days
D) 3 days

Question

Quizplus · Accepted Answer

To calculate the average flow time for the Underwriting process, we need to use Little’s Law:

Average flow time = number of applications in the process / throughput

Throughput = number of applications completed per unit of time (in our case, per month)

Since we know that there are currently 140 applications with the Underwriting team and the total number of applications per month is 600, we can calculate the monthly throughput:

Throughput = 600 - 60 (in Reception) - 140 (with Underwriting) = 400 applications per month

We also know that there are 20 working days per month, so the average flow time for the Underwriting process is:

Average flow time = 140 / 400 = 0.35 months = 0.35 x 20 days = 7 days

Therefore, the answer is choice C.

Statewide Insurers Receives 600 Applications Per Month