a) b) Explain the theory of constraints. What implications does this theory have for managing costs. (2 marks Suggested time 6 minutes) In a recent state government budget, the Motor Registration and Licensing Ofce suffered substantial cutbacks. As a result, each department has been asked to submit a cost budget for the coming year that is 10 per cent lower than the costs for the current year.The Licensing Department, which employed 50 people, issues driver's licences to qualied applicants. On average the department processes 250 licences per hour. To achieve the required cost saving, the branch manager has decided to reengineer the process. The proposed process will require a staff of 45 people and consist of 5 consecutive activities. (i) Area A would have a staff of 5 people and be responsible for receiving each application and checking that it is complete. They could process 250 applicants per hour. (ii) Area B would have a staff of 8 people, who confirm that the applicant is qualied to drive. They could process 350 applicants per hour. (iii) Area C would have a staff of 10 people, who take the applicant's photo. They could process 150 applicants per hour. (iv) Area D would have a staff of 17 people, who complete the licence card by adding the photo and a driver's licence number to the card. They could process 140 applicants per houn (v) Area E would have a staff of 5 people, who issue the licence to the applicant and process his or her payment. They could process 280 applicants per hour. REQUIRED: 1. How many driver's licence applicants would be processed per hour using the re-engineered process? 2. What is the number of staff that are required for each area in order to achieve the current level of output? 3. Identify the bottlenecks that would have to be removed to reach the current level of Output. 4. Speculate and make recommendations on possible ways the branch manager might achieve the desired level of staffing for the current level of output. . (8 marks - Suggested time 24 minutes)