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The purpose of transportation approach to locational analysis is to minimise :

  • A.Total Costs
  • B.Total Shipping Costs
  • C.Total Variable Costs
  • D.Total Fixed Costs

Answer: B

The transportation approach to location aims to minimise total shipping costs.

When a firm chooses among candidate locations for a new plant or warehouse, the transportation method of linear programming is solved for each option to find the shipping pattern from sources to destinations that minimises the total cost of transporting the goods. The location that gives the lowest total shipping cost is preferred.

Total costs, total variable costs and fixed costs bring in production and facility costs that the transportation model does not optimise; they are weighed separately, for instance in break-even location analysis.

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