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Process Analysis Problem #2 Pacific, Plumber and Placid Investment Company processes thousands of stock transactions each day at its headquarters in Peoria, Illinois. Each transaction passes through four steps and must be processed in order. The steps are the same for all transactions except for step 3. In 50% of the cases, transactions are processed only by an over-the counter (OTC) clerk, while the other 50% are processed only in the “normal” manner. Step 1 2 3 3 OTC 4 Workstation Capacity Number of Workstations (transactions/hour) per Step 10,000 1 6,000 2 4,000 1 4,000 1 3,000 3 (1) Draw a process flow diagram for this system. (5 points) (2) Which step number is the bottleneck? What is the system capacity? (5 points) (3) Suppose that there is a buffer before the bottleneck and that the system continues to accept new transactions at a rate of 10,000 transactions/hour, for 8 hours a day. How many extra hours must the bottleneck run to finish the day’s work? (Draw an inventory build up diagram for the buffer before the bottleneck.) (5 points) (4) If the OTC requirement shifts to 75% of the transactions, how could PP&P add workstation(s) to increase the system capacity to 15,000 transactions per hour? (5 points)
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Running Head: PROCESS ANALYSIS

1

Process Analysis
Name
Institution

PROCESS ANALYSIS

2
Process Analysis
Problem #2

Pacific, Plumber and Placid Investment Company processes thousands of stock transactions
each day at its headquarters in Peoria, Illinois. Each transaction passes through four steps and must
be processed in order. The steps are the same for all transactions except for step 3. In 50% of the
cases, transactions are processed only by an over-the counter (OTC) clerk, while the other 50% are
processed only in the “ normal” manner.

Workstation Capacity Number of Workstations
Step

(transactions/hour)

per Step

1

10,000

1

2

6,000

2

3

4,000

1

3 OTC

4,000

1

4

3,000

3

(1) Draw a process flow diagram for this system. (5 points)

10,000

6,000

4,000

4,000

3,000

PROCESS ANALYSIS

3

The transactions move from stage one through four. In this case, the first step is 10,000 transactions
and involves one workstation. The second is 6,000 and has two workstations. The thir...


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