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:

Distances (meters)
From/To I II III
I - 10 20
II - 10
III -
Flows (loads per week)
From/To X Y Z
X - 0 80
Y 30 - 150
Z 100 130 -

1. What are total weekly costs for an optimum layout?

A. $2,600
B. $6,200
C. $3,600
D. $8,200
E. $7,200

Answer 1

The correct answer is option (A) $2,600

Step-by-step explanation:

Given data;

The data given can be tabulated below for easy understanding

Pairs Flow Distance Flow distance

X-y 30 20 600

Y-Z 280 10 2800

Z-X 180 10 1800

Total flow = 600 +2800 + 1800 = 5200

To calculate the total weekly cost, we use the formula;

Total weekly cost is = Total flow * Cost of per load

= 5200 *0.5

$2,600