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 meter moved. An analyst has prepared the following flow and distance matrices:
Which layout will minimize the total distance loads will be moved each week?
A) X in 1; Y in 2; Z in 3
B) X in 1; Z in 2; Y in 3
C) Y in 1; X in 2; Z in 3
D) Z in 1; X in 2; Y in 3
E) Z in 1; Y in 2; X in 3

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 meter moved. An analyst has prepared the following flow and distance matrices: 
Which layout will minimize the total distance loads will be moved each week?
A) X in 1; Y in 2; Z in 3 
B) X in 1; Z in 2; Y in 3 
C) Y in 1; X in 2; Z in 3 
D) Z in 1; X in 2; Y in 3 
E) Z in 1; Y in 2; X in 3

Quizplus · Accepted Answer

To minimize interdepartmental transportation costs, the departments should be located in the areas with the shortest distances to the other departments they will interact with. Using the flow and distance matrices, it can be seen that department X interacts with both departments Y and Z, whereas departments Y and Z do not interact with each other. Therefore, it would be best to place department X in area 1, which is closest to areas 2 and 3 where departments Y and Z will be located, respectively. Then, it would be best to place department Z in area 2, which is closest to department X, and finally place department Y in area 3, which is closest to department X. This layout would minimize the total distance loads will be moved each week.

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