Question

We are trying to place four departments (1, 2, 3, 4) into locations (A, B, C, D). Cost of transportation is $1 per yard. The layout of the locations, distances between the locations, and the number of trips per day between departments are shown below:

Location A	Location B	Location C
	Location D

Distance between locations (yards)
	To:
From	A	B	C	D
A	-	40	80	70
B		-	40	50
C			-	60
D				-

Number of trips per day between departments
	To:
From	1	2	3	4
1	-	10	20	80
2		-	40	90
3			-	55
4				-

If department 1 is assigned to location A and department 2 is assigned to location C, what is the daily cost (in dollars) of transportation between departments 1 and 2? (Each trip-yard costs $1, so ten trips of 40 yards cost $400)

Answer 1

The daily cost (in dollars) of transportation between any 2 departments is given as below

Daily Cost = (Number of trips between the two departments)*(Distance between the two departments in yards)*(cost per yard)

If department 1 is assigned to location A and department 2 is assigned to location C then we have the below

As seen from Table 3, number of trips between department 1 and department 2 = 10 trips

As seen from Table 2, distance between the assigned location A and C in yards = 80 yards

It is given that cost per yard = $1 per yard

Hence we have the required daily cost as below

Daily Cost = 10*80*1 = $800

Hence, if department 1 is assigned to location A and department 2 is assigned to location C, the daily cost (in dollars) of transportation between departments 1 and 2 is $800