A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices:
What is the distance (in meters) from area III to area I in this new facility?
A) 0
B) 10
C) 20
D) 30
E) 40

Question

A company needs to locate three departments (X, Y, and Z) in the three areas (I, II, and III) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.50 per load per meter moved. An analyst has prepared the following distances and flow matrices: 
What is the distance (in meters) from area III to area I in this new facility?
A) 0 
B) 10 
C) 20 
D) 30 
E) 40

Quizplus · Accepted Answer

Looking at the distance matrix, the distance from area III to area I is 20 meters. To minimize interdepartmental transportation costs, the departments should be located in the areas that are closest to each other. Based on the flow matrix, department X has the highest flow to area I, department Y has the highest flow to area II, and department Z has the highest flow to area III. Therefore, the best choices would be:
X in area I, Y in area II, Z in area III. This would minimize the overall transportation costs since each department is located in the area closest to it.

A Company Needs to Locate Three Departments (X, Y, and Z)