5 ANSWER 1 The bottleneck of the process is the second reactor, and the overall process capacity is 50 tons per hour. This is because the second reactor has the lowest capacity and the longest residence time for the iron ore among the seven process steps. The other steps have higher capacities, but they can only work at the rate of the second reactor, so the overall process capacity is limited to this rate. For example, even though the pre- heater has a capacity of 60 tons per hour and the fla sh heater has a capacity of 62.5 tons per hour, the iron can only be processed at a rate of 50 tons per hour in the second reactor, so the overall process capacity is limited to this rate. Wow! Not only is the answer correct, but it is also superbly expl ained. The idea of the bottleneck as the rate limiting step was clearly understood and all calculations were carried out correctly. I don’t see any reasons to take points off from this answer: A+! INVENTORY TURNS My second question tests the concept of inv entory turns and working capital requirements in a business. Here it comes: QUESTION 2 World -Antique is a new venture under development by two graduates of a New England business school. The value proposition of the venture is simple: purchase antique paintings at yard sales and auctions and then sell them at quadruple the purchase price via a simple eCommerce site (i.e., a painting that is purchased for $100 would be sold at $400). Based on an analysis of similar retailers, the founders expect to turn their inventory 1.5 times per year. To achieve an annual revenue of $3,000,000, how much inventory expressed in $’s should the founders expect their operation to require?