You are designing a production system for a process that has two serial operations, process A$,$ followed by process $B$; connected by a material handling system. Data for the processing operations is provided below.

$\backslash$table$[[,$Average processing time $($minutes$),$Std Dev of processing time$],[$Process A$,14,4],[$Process B$,20,6]]$

Demand is $8,000$ parts per year $($or $0\mathrm{.}05$ per minute$),$ and process replenishment lead$-$time is based on $0\mathrm{.}99$ probability of process completion $)=(2\mathrm{.}33.$ The item has a value of $$150,$ and the annual holding rate is $20\%.$ Assume the material handling replenishment lead$-$time for a part is $0\mathrm{.}05$ years. Assume a $25\%$ safety factor.

The two processes are separated by $200$ feet. There are two material handling system alternatives: MH$\_1$ has an annual fixed cost of $$10,000$ and a variable cost of $$0\mathrm{.}40$ per load per foot and can transport up to $100$ units per load, or MH$\_2$ has an annual fixed cost of $$20,000$ and a variable cost of $$0\mathrm{.}05$ per load per foot and can transport up to $200$ units per load.