Reference no: EM132954653

The claims processing unit of an auto insurance company receives 40 claims per hour. The claims go through 4 possible stages, see figure below. In each stage, a claim is handled by only one worker.

• All claims first go through a Review stage, staffed by 4 workers. A worker at the Review stage takes 6 minutes to process a claim. After the Review stage, all claims go through an Evaluation and Verification stage, staffed by 6 workers. A worker in this stage takes 10 minutes per claim. After the Evaluation and Verification stage, on average only 25% claims turn out to be 'clean' that can be directly authorized for payment. The remaining 75% of claims require a further Management Review for handling exceptions. There are 6 workers at the Management Review stage, and it takes 15 minutes for a worker to perform a management review per claim. After the Management Review, only 60% of the claims are approved and authorized for payment. The remaining 40% of the claims are rejected and exit the system. There are two workers at the Authorization for Payment stage who issue payment for approved claims, and it takes a worker 5 minutes per claim.

Problem 1: What is the "entry" capacity of the entire system in claims per hour, i.e., the maximum number of claims per hour that the system can receive and process"?