Question

Mark Schmidt, the OM of Harmon Music Company needs to come up with the layout decision of a new manufacturing facility that is built to meet the production of wind instruments. There are 4 main departments of equivalent size in the facility: the design office, steel shop, paint shop and sub-assembly area. The importance of their closeness to each other is given in the Relationship chart below. (The higher the score is, the more important it is to locate the departments closer.)

	Design Office	Steel Shop	Paint Shop	Sub-Assembly Area
	1	2	3	4
Design Office	-	4	2	0
Steel Shop		-	3	1
Paint Shop			-	5
Sub-Assembly Area				-

There are 4 candidate locations for these shops with the following distance matrix with respect to each other:

	Distance (in 100 m's)
	1	2	3	4
1	-	10	15	20
2		-	10	20
3			-	15
4				-

Using PEM (pairwise exchange method), find the best solution to locate each department in each one of the locations 1, 2, 3 and 4 in order to maximize the efficiency according to the Relationship matrix.

(Hint: Start with the initial solution where you locate the design office at location 1, steel shop at 2, paint shop at 3 and sub-assembly area at 4.)

Answer 1

Paint Shop (PS) and Subassembly Area (SA) have the highest score (5), so these should be located nearest. So these should be located at 1-2 or 2-3. Let's locate them at 1-2

Next pair of departments having the highest score (4) are Design Office (DO) and Steel Shop (SS). These can be located at 3-4

Steep shop (SS) and Paint shop (PS) have the next highest score (3). These should be located at 2-3

Design office (DO) and Paint Shop (PS) have the next highest score (2). These should be located at 2-4

Optimal layout is following

Location	Dept
1	SA
2	PS
3	SS
4	DO

Composite score = 5*10 + 3*10 + 4*15 + 2*20 + 1*15 = 195