1. Consider a serial production line with three stations. (Serial meaning that a part goes to station 1, then station 2, then station 3 to complete processing. For example, a piece of metal is cut at station 1, a hole is drilled in it at station 2, and a bolt is run through the hole and fastened with a nut at station 3.) The current rates of production for each station are given in the table below. The table also contains information concerning how much the productivity at each station can be increased by performing a productivity improvement project. Assume that only one such project can be done per year and that the productivity improvement resulting from a project is the same no matter what year it is done. Assume that more than one productivity project can be done at a station over time (for example in the first five years you could do a productivity project at station 1 each year resulting in a 12% increase in productivity each time.) Also, assume that the production rates are averages so that you can have fractional values.
   1. What is the current production rate of the line?
   2. Is the current line efficient? Why or why not?

3. If the objective is to maximize production over the next 5 years, what is the best sequence of projects to perform?

Station

1

2

3

Original output rate per day

7.8

8.6

7.5

Productivity increase per project

1.12

1.07

1.09