1. Manzana Insurance's Fruitvale branch is experiencing a loss of business due to late renewals and long turnaround times on new policies and quotes. These problems created an opportunity for a competitor to gain market share. The misinterpretation of business income for new policies versus policy renewals has placed undue emphasis on new policies, causing a loss of profitability. The company has official priorities regarding the delivery times and order of processing of insurance policies. Officially, company policy is to use a first-in-first-out (FIFO) system to process policy requests. However, these priority rules are not followed. In practice, new policy demands are given priority over existing policies. The employee compensation plan does not support FIFO, due to the 25% commission paid on new policies. Lead time and schedule calculations are biased to use an exceptionally high 95% of the worst-case standard completion time (SCT) to determine the average processing time. The combination of these factors has created a situation where product priorities and planning inaccuracies prevent Manzana from achieving the company's production and profitability goals. 2. From the analysis, there is no bottleneck resource, however, Underwriting Team #. the highest capacity. When analyzing the data in Exhibit 6, it is obvious that there has been a dramatic increase in the number of missed renewals since 1990. This is the result of the 1990 underwriting department reorganization, in particular, the allocation of agents to specific underwriting teams. Exhibit 7 reveals the nature of the problem: individual underwriting departments may have too many policies to process if their assigned territory has a high number of policy requests, while other underwriting teams may have excess capacity.