Consider a two-station production line (12) with ample raw material input available. You can think of the line as a process and the stations as resources performing specific process steps. Station 1 consists of a single machine that has potential daily production of two, three, four, or five units, with each outcome being equally likely to occur. Station 2 consists of a single machine that has potential daily production of either three or four units, both of which are equally likely. So, the average production rate of each station is 3.5 units per day. Answer the following questions (at most 25 points are required):

1. If you allow as much buffer inventory between the two steps as needed, compute the expected daily process capacity of the line.

2. If no buffer inventory is allowed between the two stations (process steps), compute the expected daily process capacity of the line. [Hint: It may be useful to mentally simulate the line for each daily production outcome at each station and note the lines output.] If you cannot compute the exact capacity, then (i) discuss how (an approach) to determine the process capacity of the line and (ii) discuss how the capacity in a line with no buffer inventory will compare to your answer in part I.A.1 above.

3. How does the process capacity change with the amount of buffer inventory allowed between the two steps? What process principle(s) or idea(s) from OM7011 does question I.A.2 above illustrate.

4. Suppose a second machine (identical to the existing one) is be added to either station 1 or station 2. Add this second machine to the station of your choice (either station 1 or 2 will do) and then compute the new process capacity of the line without buffer inventory between stations.