Imagine that you are running your Littlefield factory with a single server (i.e., one machine) at each of the three stations. Customer orders are arriving to Littlefield at the stable average rate of 15 orders per day, with the time between order arrivals distributed exponentially. All orders are processed as a single batch of 60 units. The average processing times for an order at the four steps are 1.8, 1.2, 0.3, and 0.5 hours, respectively. Assume that each of the processing times is distributed exponentially.

(a) What is the capacity utilization at each of the three stations?

(b) What is the average throughput time for a customer order?

(c) What can you conclude about the average revenues you would receive if you offered contract 2 (revenue of $1,000 for orders delivered within 1.0 days, with the revenue declining smoothly to $0 for an order that is delivered after 2.0 days)?

What would be the average amount of work-in-process inventory within the Littlefield facility?