In this thesis, we study three different but closely related production system design problems. First, we investigate the effects of various design factors such as number of stations, buffer capacity, allocation of bulfers and location of a bottleneck on the interdeparture time variability of serial production lines. In the second part, we study the effects of number of component stations, processing time distributions, buffers and buffer allocation schemes on throughput and interdeparture time variability of assembly systems. As an alternative to work transfer, we introduce variability transfer and assess its effectiveness. We analyze the anomaly displayed by optimal throughput for some processing time distributions and uncover the underlying details of this behavior. In the third part, we analyze serial production lines and assembly systems under constant workload condition. In addition to investigating the problem of determining the optimal system size, we examine the effects of other design factors such as buffers and material handling time on throughput, interdeparture time variability and cost related measures. Each part reveals several important findings. We also discuss the managerial implications of these findings to present guidelines for the practitioners.