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Consider the following two---step manufacturing line. Step A has a processing time of 1 minute per unit, but no setup is required. Step B has processing time of 0.1 minute per unit, but a setup time of 9 minutes is required per batch.
(a) Supose units are produced in batches of 12 (i.e., after each set of 12 units are produced Step B must incur a setup of 9 minutes). What is the capacity of the manufacturing line. (in units per minute)?
(b) What batch size would you recommend so that there is minimum inventory? Assume there is ample demand.
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How could these differences create a problem for the acquiring firm? Give an example in each case.
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