Question

Using the information in the following table and assuming that the cost of transferring units between 2 adjacent departments is $5/unit and between 2 non-adjacent departments is $8/unit,

1. Calculate the cost for the existing layout.     
2. Design a layout that will have a lower cost and calculate the cost.

Load Summary Chart
To From	A	B	C	D	E	F
A		15	50			125
B	20		25		75
C	50				120	120
D			60		25
E		50	100
F	110		100	40

Existing Layout

A	B	C
D	E	F

Answer 1

Adjacent departments are those having at least one common side

So A is adjacent to B and D; B is adjacent to A,C and E and so on.

a)

Cost of existing layout = Load between AB * 5 + Load between AC * 8 + Load between AF * 8 + Load between BC * 5 + Load between BE * 5 + Load between CD * 8 + Load between CE * 8 + Load between CF * 5 + Load between DE * 5 + Load between DF * 8

= (15+20)*5+(50+50)*8+(125+110)*8+(25+0)*5+(75+50)*5+(0+60)*8+(120+100)*8+(120+100)*5+(25+0)*5+(0+40)*8

= $ 7,390

b)

We see that there are high number of loads between departments AF, CE, CF . So, these should be adjacent.

An improved layout is following:

B	F	A
E	C	D

Cost of improved layout = Load between AB * 8 + Load between AC * 8 + Load between AF * 5 + Load between BC * 8 + Load between BE * 5 + Load between CD * 5 + Load between CE * 5 + Load between CF * 5 + Load between DE * 8 + Load between DF * 8

=(15+20)*8+(50+50)*8+(125+110)*5+(25+0)*8+(75+50)*5+(0+60)*5+(120+100)*5+(120+100)*5+(25+0)*8+(0+40)*8

= $ 6,100