A. Process Analysis - Role of WIP Buffers under Uncertainty: Consider a two-station production line (1+2) with ample raw material input available. Think of the line as a process and the stations as resources performing specific process steps; unless otherwise stated, each station has a single machine. Station 1 has potential daily production of two, three, four, or five units, with each outcome being equally likely to occur. Station 2 has potential daily production of either three or four units, both of which are equally likely.

1. (5 points) If you allow as much buffer inventory between the two steps as needed, compute the average or expected daily process capacity of the line

2. (*15 points) If no buffer inventory is allowed between the two stations (process steps), compute the average or expected daily process capacity of the line. If you cannot compute the exact capacity, then) discuss an approach to determine the process capacity of the line and (ii) discuss how the capacity in a line with no buffer inventory will compare to your answer in part 14.1 above. (Hint: It may be useful to mentally simulate the line for each daily production outcome at each station and note the corresponding line's daily output: you can simulate station 2's behavior with a coin toss and station I's with roll of a dice (ignoring occurrence of 1 and 6). A table list all possible combinations of the stations potential daily production can be useful to determine the line's average daily production

3. (5 points) How does the process capacity change with the amount of buffer inventory allowed between the two steps? What process principle(s) or idea(s) from OM7011 does question 1.A.2 above illustrate.

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