The SRG Corporation uses an injection mould-ing machine to make a plastic product, Z39. SRG makes products only after receiving firm orders from its customers. SRG estimates that it will receive 50 orders for Z39 (each order is for 1,000 units) during the coming year. Each order of Z39 will take 80 hours of machine time. The annual capacity of the machine is 5,000 hours.
REQUIRED
1. Calculate (a) the average amount of time that an order for Z39 will wait in line before it is processed and (b) the average manufacturing lead time per order for Z39.
2. SRG is considering introducing a new product, Y28. SRG expects it will receive 25 orders of Y28 (each order for 200 units) in the coming year. Each order of Y28 will take 20 hours of machine time. The average demand for Z39 will be unaffected by the introduction of Y28. Calculate (a) the average waiting time for an order received and (b) the average manufacturing lead time per order for each product, if SRG introduces Y28.