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

question 105

Multiple Choice

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: $\begin{array}{l}\text { Distances (meters) } \quad\quad\quad\quad\quad\quad \text { Flows (loads per week }\\\begin{array}{rlll}\text { From/To } & \text { I } & \text { II } & \text { III } \\\hline \text { I } & - & 10 & 20 \\\text { II } & & - & 10 \\\text { III } & & & -\end{array}\quad\quad\begin{array}{rlll}\text { From/To } & \mathrm{X} & \mathrm{Y} & \mathrm{Z} \\\hline \mathrm{X} & - & 60 & 90 \\\mathrm{Y} & 40 & - & 160 \\\mathrm{Z} & 110 & 140 & -\end{array}\end{array}$ What are total weekly costs for the least costly process layout?

• A) $2,800
• B) $3,150
• C) $3,500
• D) $4,000
• E) $4,500

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Definitions:

Human Resources

The department within an organization that deals with the recruitment, management, and guidance of its employees.

Long Run

A period in economics where all factors of production and costs are variable, allowing for all inputs to be adjusted.

Computer Technology

The study and use of computers, software, and systems for processing, storing, and sending information.

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.