Buffer storage of the work-in-process inventory, decouples successive stages of automatic transfer production lines, assuring partial operability under machine failure. Certain special features such as secondary (standby) machines, special maintenance and diagnostic systems can lengtben the uptime or shorten the downtime of individual stages. When special features forKstages and spaces forMbuffers are available, it is of great interest to system designers to know which stages should have the special features and where the buffer spaces should be inserted to maximize the line output rate. This paper addresses itself to such design problems. A bivariate dynamic programming procedure is developed which provides a layout for the buffers and an allocation of special features, maximizing the line output rate as defined by Buzacott (1967, 1968). The Buzacott formula is based on a heuristic argument which provides, in general, an upper bound on the true system output rate.