Process Lead Time
Littles Law (ref: Lean Six Sigma, by M. George, 2002, McGraw Hill) is used to calculate the Process Lead Time by dividing the number of items in process by the completions per hour.
Littles Law: Lead Time=# Items In-Process / Completion Rate
For example, if it takes two hours on average to complete each Purchase Order, then there are 0.5 completions per hour. This is the denominator of the Littles Law equation. If there are ten Purchase Orders waiting in queue (the numerator), then Littles Law says we need ten divided by one-half equals twenty hours lead time for the process. In other words, we cannot process any new orders until the twenty hour lead time has allowed the existing Work in Process to be completed.
Once Lead Time is known, Velocity can be calculated.