Scrutinise the Process Sequences and Calculate Annual Cost
A company produces a range of product, but the dominant demand is for three of them, A, B and C. The table shows the annual demand, transport cost per unit per metre, and process sequence through departments 1 - 6, for each of them.
The layout has to fit into a building of 30m × 40m floor plan, and the area requirements of the departments are:
How would you lay out the departments?
Hint: scrutinise the process sequences and calculate the annual cost per metre separation between department's e.g. only products A and C move between departments 1 and 2, and the annual cost per metre is (1000 £0.20) (500 £0.40) £400 per metre per annum.