2 questions Assignment Example | Topics and Well Written Essays - 500 words

2 questions - Assignment Example Furthermore, if this business is new or small, then this method is very unsuitable. In choosing maxmin criterion, the management will be looking at the worst possible situation in all the options and then adopting the option that provides the least bad results; that is, they adopts the option that optimizes the least profits. As already discussed, this criterion will not be attractive to this particular company if its owners are risk averse decision makers because the method is based on excessive watchfulness. However, while adopting Laplace method, the management should be sure that they are not conversant of chances of different conditions and have no reason to decide otherwise. From the calculations, the most central location is B; therefore, the most frequented department (4) should be placed there. The department that makes more trips to department 4 is department 2, therefore should be placed at the locations closest, for instance A, which is 40 yards from A. Second priority should be offered to department 1, which makes 80 trips to department 4. This department should be placed at location C, which is 40 yards from location B. Automatically, the last department, which is 3, will be located at location D, which is the most distant location at 50 yards from department D’s location (Stevenson, 2008). Following the revised trips schedule, minimizing travel costs will be best when the departments are placed as described below. The highest number of trips are made to department 4, therefore, it should be placed at the most central location. Therefore, taking the distances indicated in part a, department 4 should be placed at location B, which is 40 yards from location A; 40 yards from location C; and 50 yards from location D. However, priority should be given to department 3, which does 60 trips to department 4. Department 3 should be placed at either location C, then department 2, which makes 50 trips to