In a recent state government budget, the Lands Transport Authority (LTA) of Fiji suffered substantial cutbacks. As a result, each department has been asked to submit a cost budget for 2013 that is 10 percent lower than the costs for 2012. The Licensing Department, which employs 50 people, issues driver's licenses to qualified applicants. On average the department processes 250 licenses per hour. To achieve the required cost saving, the branch manager has decided to re-engineer the process. The proposed re-engineered process will consist of 5 consecutive activities and require a staff of 45 people as follows: 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. Area B would have a staff of 8 people, who confirm that the applicant is qualified to drive. They could process 350 applicants per hour. Area C would have a staff of 10 people, who take the applicant's photo. They could process 150 applicants per hour. Area D would have a staff of 17 people, who complete the license card by adding the photo and a driver's license number to the card. They could process 140 applicants per hour. Area E would have a staff of 5 people, who issue the license to the applicant and process his or her payment. They could process 280 applicants per hour. REQUIRED 1. Briefly explain how business process re-engineering can result in cost saving? (4 marks) 2. Using the theory of constraint (bottleneck), how many drivers' license applicants would be processed per hour using the re-engineered process? (1 mark) 3. Identify the bottlenecks (Areas) that would have to be removed to reach the current level of output; that is 250 licenses per hour. (2 marks) 4. Make recommendations on the number of staff required for each area in order to achieve the current level of output (i.e. 250 licenses per hour). Remember that to achieve the required savings, the maximum staff size is 45. (Show ALL necessary calculations. HINT: Calculate the number of license that each person can process per hour in each area first before determining the number of people to add or release from each area).