Penik Gaban Pte. Ltd. recently underwent a major change in the management structure. The new management team has decided to revise the existing layout, which is felt ineffective. The summary of trips between departments is given in Figure 4.1(a) while Figure 4.1(b) shows the grid location of departments of the existing layout.

1. Analyze the given data and suggest a new grid location for the five (5) departments. Show all the steps involved to convince the management.

2. Determine the cost saving resulting from the proposed new layout as compared to the existing one. Assume that all the departments have the same size 20m X 30m and the traveling cost/distance for the adjacent departments is RM2.00. The traveling cost/distance for the non-adjacent departments is twice the adjacent departments.
    

To From A B C D E BCD 13060 A B 65 - 8050 30 140 60 90 E 270 40 - 40m A D 90m B E C (a) (b) Figure 4.1: (a) From-To chart of trips between departments, (b) Grid location of the departments in the existing layout