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Island Bank Inc. intends to open an office in a five-story structure on Lamma Island to accommodate five separate departments, each of which will occupy exactly one level. They are:

A) Retail banking, B) Loans, C) Vault, D) Bills, and E) Treasury divisions

The administration of the bank has a few layout options to examine. The first option is to have a layout in the following order: A) on G/F, B) on 1/F, C) on 2/F, D) on 3/F, and E) on 4/F.

The following matrix table depicts the daily document volume flow among the several divisions:

Option 1 (flow)

The unit transport cost is $1 between two consecutive floors, as shown in the table below. (All figures in $):

Question:

1(a) Compute the total transport cost for Option 1. Show all your steps.

1(b) There is an Option 2 to swap between A and B, i.e. in the sequence of B, A, C, D, E. Complete the table, b1 to b6 below with the new inter-division flows (some are already filled in).

1(c) What will be the new total transport cost for Option 2? Show all your steps

1(d) From the Option 1 and Option 2 above, many customers think that Option 1 would be a better layout. Explain this with two reasons in term of customer satisfaction.

1(e) The lean techniques are not only used in manufacturing but also used in services. Suggest three methods with details of how to implement lean layout in Island Bank Inc. to improve the service quality.

Between A B D E A 60 110 40 40 B 20 0 10 C 50 50 D 120 E Between A B C D E A 1 2 2 3 4 B 1 2 3 C 1 N D 1 E Option 2 (flow) Between A C ID E IB (11) 10 (62) (64) (63) (b5) (56) 40 IC 50 ID 120 E