A company needs to locate three departments (A, B, and C) in the three areas (I,

Question

A company needs to locate three departments (A, B, and C) in the three areas (I, II, and IlI) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.40 per load meter moved. An analyst has prepared the following flow and distance matrices: Distance (meters) Flows (loads per week) 30 20 10 60 90 70 40 - 8060 In what areas, I, II, and III, should departments A, B, and C be located that minimize the total cost of moving loads over the distance? (Be sure to identify the total cost for this plan)

Explanation / Answer

Answer:

Cost minimization:

Total cost:

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