Explain the meaning of each of the following terms Use a sep

Explain the meaning of each of the following terms. Use a separate diagram and refer to at least one industrial example in each case: (a) Pareto Law (b) Vertical Integration (c) Second-tier (d) B20 (e) Little\'s Law (4 marks) (4 marks) (4 marks) (4 marks) (4 marks)

Solution

a. Pareto law - The law defines unequal cause and effect relationship where 80% effects can be attributed to20% causes. It is used to identify the key activities that affect majority of outcomes. An example is that there are 2 or 3 causes that are responsible for majority types of defects in a manufacturing process.

b. Vertical Integration- It is a strategy to combine different stages of production process for strategic business advantage. In other words it is the process of integration of either supply side or distribution side to make the process more efficient. An example is ownership of a supply system ( dairy) by a manufacturer of sweets.

c. Second tier - Something that is second tier is lesser important, lesser in output or size and less significant as compared to the other entities in the same categories. An example is the second tier cities, or the ones which are of lesser strartegic importance.

d. B2C - It is a system where businesses sell directly to the consumers without any intermediaries. An example is the an educational institute that has single channel admission process where student himself or herself applies for and gets enrolled

e. Little\'s law - It relates the lead time, work in progress and the completion rate, and is basis of the queuing theory. According to it, L = lambda x W

Where L is the no. Of customers waiting, lambda = Avg arrival rate and W = Time spent by each customer in the system.