A company needs to locate three departments (I, II, and III) in the three areas (A, B, and C) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.30 per load per meter moved. An analyst has prepared the following distances and flow matrices: Distance (meters)

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  • A company needs to locate three departments (I, II, and III) in the three areas (A, B, and C) of a new facility. They want to minimize interdepartmental transportation costs, which are expected to be $.30 per load per meter moved. An analyst has prepared the following distances and flow matrices:

Distance (meters)                                      Flows (loads per week)

From/To                A          B          C          From/To          I           II          III

A                -           10        30                    I           -           60        110

B                            -           50                    II          90        -           80

C                                        -                       III         80        90        -

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?  (Identify assignments and total cost)

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