A national automobile insurance company uses a multistep process to evaluate automobile damage and to settle damage claims for their policyholders. When a policyholder notifies the company that an accident has occurred, a claims adjuster is assigned to the case. He or she evaluates the damage and prepares a claims report. Multiple repair facility estimates are compared with the claims report prepared by the adjuster and repairs are authorized. This is the most time-consuming step in the claims process. When the repairs are complete, the repair facility is paid by check. The company typically completes 5,000 claims per week. Most claims are paid within 10 days from the time a claims adjuster initially evaluates the damage.

a. Identify throughput for the insurance company.

b. What is the cycle time associated with a typical claim?

c. What is the bottleneck process?

d. Are the concepts of throughput, cycle time, and bottlenecks relevant to both service and manufacturing firms? Explain.