
To determine: The new placement of departments that will minimize the total transportation costs.
Introduction:
Product layouts:
Product layout is a production system where the equipment and workstations are placed along the production and assembly lines. A conveyor is used to move the production units along the line. Product layouts have specialized labor to perform specific functions with the help of equipment (programmed to do a specific tasks in a repetitive manner). The layout is mostly based on the processing sequence.
Process layouts:
Process layout is a production system where the equipment is placed in a system based on their functions. The production line is planned to eliminate wastes. In certain process layouts, the machineries and work settings are not arranged as per the standardized production sequence. However, there would be an assembly having similar machineries and operational activities depending on the requirement. For example, paint department.

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