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- Calculate the movement cost of the current layout

- Create a better layout and the new movement cost. The layout must be linear. What is the movement cost savings?

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pohnpei397 | Certified Educator

In order to calculate the movement cost in this example, we must first assign some monetary value to each movement.  For the sake of simplicity, we will assign the value of \$1.  That means that whenever a load (in this case, a new driver) moves from one station to another, a cost of \$1 is incurred.  For example, a driver moving from Station A to Station B incurs a \$1 cost because those stations are adjacent, but a driver moving from Station A to Station C incurs a cost of \$2 because that driver must move from Station A to Station B (\$1 cost) and then from Station B to Station C (\$1 cost).

Having assigned this value, we now need to look at the monetary cost of all the movements shown in the table in your question.  The movements and their costs are as follows:

A to B:                  20 drivers x 1 movement               \$20

A to C:                  100 drivers x 2 movements           \$200

B to D:                  150 drivers x 2 movements           \$300

C to A:                  85 drivers x 2 movements              \$170

C to D:                  15 drivers x 1 movement               \$15

D to A:                  70 drivers x 3 movements              \$210

D to B:                  120 drivers x 2 movements           \$240

When we add all of the costs up, we find that the movement cost of the current layout is \$1200 each day.

To create a new layout that is less costly, we need to try to put the stations with the greatest traffic right next to one another.  That way, we would stop having things like the \$300 cost of drivers moving two stations from B to D and the \$240 cost of drivers moving the two stations from D to B.  If B and D were adjacent, that change alone would cut those drivers’ cost in half and save us \$270 of movement cost.

To put heavy traffic stations adjacent to one another, we should create a layout of

B-D-A-C

Let us look at the costs in such a layout:

A to B:                  20 drivers x 2 movements              \$40

A to C:                  100 drivers x 1 movement             \$100

B to D:                  150 drivers x 1 movement             \$150

C to A:                  85 drivers x 1 movement               \$85

C to D:                  15 drivers x 2 movements              \$30

D to A:                  70 drivers x 1 movement               \$70

D to B:                  120 drivers x 1 movement             \$120

In this layout, the movement cost would only be \$595.  This layout would save us \$605 in movement costs each day.