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Given the Following Process Layout Data for Locating Four Departments

question 94

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Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4):  Distances (meters)  Flows (loads per week  From/To 12341501001502501003504 From/To  A  B  C  D  A 104050 B 301070 C 601040 D 305020\begin{array}{l}\text { Distances (meters) } \quad\quad\quad\quad\quad\quad \text { Flows (loads per week }\\\begin{array}{rlll}\text { From/To } & 1 & 2 & 3 & 4 \\\hline 1 & - & 50 & 100 & 150 \\2 & & - & 50 & 100 \\3 & & & - & 50 \\4 & & & & -\end{array}\quad\quad\begin{array}{rlll}\text { From/To } & \text { A } & \text { B } & \text { C } & \text { D } \\\hline \text { A } & - & 10 & 40 & 50 \\\text { B } & 30 & - & 10 & 70 \\\text { C } & 60 & 10 & - & 40 \\\text { D } & 30 & 50 & 20 & -\end{array}\end{array} If department C must be located in area 1, what layout will minimize the total distance loads will be moved each month?

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Definitions:

Stackelberg Leader

A firm in a duopoly that maximizes its profit by making the first move and setting its output level, anticipating the response of the follower firm.

Maximize Profits

The process of making the most favorable decisions to achieve the highest possible earnings after expenses.

Conjectural Variation

An expectation of how rival firms will react to a change in the quantity and price of goods a firm markets.

Demand Function

A mathematical formula that describes the relationship between the quantity demanded of a good and its various determinants such as price, income, and substitute prices.

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