A system has three sequential stages (A, B and C) with no buffers in between the stages. The system processes products of

three different sizes with the capacities expressed in lbs/hour. The details for the three stages are shown below.

Stages	Processing Capacity	Setups and Other Information
A	20000 lbs/hour	Setup of 20 mins if changing to a different size
B	20,000 lbs/hour	Has to be shut down for maintenance for 30 minutes after every 90 minutes of operation
C	18,000 lbs/hour	No setups

Questions:

The system operates for 8 hours per day, 6 days per week and for 36 weeks in the year. Assume that the system is in steady state with a continuous demand for the products.

Assume the product is set up for one size only. Based on the above information, answer the following questions:

a) How many lbs. of the product can be processed in a 8- hour shift?

b) Assume Stage A has been setup for the type of product to be processed in a shift. How much idle time is there in this stage during such a shift?

c) If you would add capacity to any of the above stages to increase output, which stage will you add capacity to? And by how much? Why?

d) Assume that cost of adding storage is $30/lb. while the cost of reducing setup time by 50% is $20,000 for Stage B and $10,000 for Stage A. What action would you recommend to maximize output from this system? How much capacity would this add and at what cost?