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GATE2020-ME-1: 33

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For an assembly line, the production rate was $4$ pieces per hour and the average processing time was $60$ minutes. The $\text{WIP}$ inventory was calculated. Now, the production rate is kept the same, and the average processing time is brought down by $30$ percent. As a result of this change in the processing time, the $\text{WIP}$ inventory

  1. decreases by $25\%$
  2. increases by $25\%$
  3. decreases by $30\%$
  4. increases by $30\%$
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