13. To remain competitive, Ed’s Sheet Metal must reduce manufacturing lead time for a product that typically sells in lots of 800 units. The product goes through two operations in different departments.

The company wants to evaluate the value of using a transfer batch between operations. Its idea is to split the order at the first operation and transfer an amount to the second operation to get it started while the rest of the order is finished at the first operation. The setup of operation 2 can start as soon as parts arrive, but not sooner. Other data are:

Order size 800 units Operation 1 processing time 6 minutes/unit Operation 2 processing time 8 minutes/unit Transfer time from operation 1 to 2 20 minutes Setup time for operation 1 1.0 hour Setup time for operation 2 1.5 hours

a. What is the minimum transfer batch that assures that operation 2 has no idle time?

b. How much would manufacturing lead time be reduced by using the transfer batch instead of the full order of 800 units?