Given the Following Process Layout Data for Locating Four Departments

question 94

Short Answer

Given the following process layout data for locating four departments (A, B, C, and D) in four areas (1, 2, 3, and 4): $\begin{array}{l}\text { Distances (meters) } \quad\quad\quad\quad\quad\quad \text { Flows (loads per week }\\\begin{array}{rlll}\text { From/To } & 1 & 2 & 3 & 4 \\\hline 1 & - & 50 & 100 & 150 \\2 & & - & 50 & 100 \\3 & & & - & 50 \\4 & & & & -\end{array}\quad\quad\begin{array}{rlll}\text { From/To } & \text { A } & \text { B } & \text { C } & \text { D } \\\hline \text { A } & - & 10 & 40 & 50 \\\text { B } & 30 & - & 10 & 70 \\\text { C } & 60 & 10 & - & 40 \\\text { D } & 30 & 50 & 20 & -\end{array}\end{array}$ 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:

Comparative Advantage

An economic theory stating that a country should specialise in producing and exporting goods in which it has a lower opportunity cost than other countries.

Opportunity Cost

Opportunity cost refers to the value of the next best alternative foregone as the result of making a decision.

Corn

A cereal plant that yields large kernels set in rows on a cob, a staple food in many parts of the world.

Absolute Advantage

A situation where an individual or entity can produce more of a good or service with the same amount of resources compared to others.