Question 1: Suppose that an HMO system for processing pre-natal care and baby delivery insurance claims involves three primary steps (which we will call steps A, B, and C) in a sequential manner. Employees within the same step work in parallel on separate claims at each step.

The following table shows the number of employees working on each step, and the processing time per claim.

1. Find the process flow time (ignore any waiting time) for an insurance claim.
2. Find the capacity of each step and identify the bottleneck step. What is the capacity of the entire system?
3. If all steps are working at exactly the process capacity rate, and the flow time in the system for all claims is equal to the process flow time calculated in (a), how many claims, on average, are in the system at any given time?

Step A B Number of Employees 10 50 20 Processing Time [minutes/claim] 4 12 6