The location of Variable Message Signs (VMS) has not been adequately addressed by the research community yet it is a standard practice among state and local transportation agencies. The past few years have witnessed a new trend - mainly in Asian countries (e.g. Beijing, Shanghai, Singapore) – in the use of VMSs to provide traffic flow information in full/partial LED displays. Unlike in the US where VMSs are primarily installed to provide information on freeway/tollway traffic flow conditions, the new trend is to also provide traffic flow conditions throughout the City including the arterial system. The use of VMS may be viewed as an interim traveler information solution until the majority of vehicles are equipped with in-vehicle navigation and traveler information services in real time and/or smartphones with applications on real-time traffic flow information – the latter is expected to be available faster than any other solutions. Regardless of the use of smartphones and in-vehicle navigation/information devices to obtain real-time traffic flow information, it is expected that VMSs will still play a role for the next 10 to 20 years, and DOTs will continue to install them to provide this traveler information service to their customers. Given the financial difficulties that the transportation sector is now facing and is expected to face in the future it makes it extremely important to select the optimal number and location of VMSs in order to satisfy the travelers’ and transportation agencies’ objective(s) while minimizing cost. The cost for installing a VMS sign can vary from $100K to $1M, excluding the operational cost. Installing such a system throughout a metropolitan area may require more than 100 VMS signs for a cost that can range from 10 to 100 million dollars. It is a significant budget item for any transportation agency to be allocated to traveler information services and traffic operations. The question that is often being asked by transportation agencies prior to the installation of a VMS signs is: What would be the impact of this VMS on traffic flow improvement on a year by year basis? The second question is, How much it will cost to install and operate? The third question then is, How much budget should we allocate to have the best improvement in the performance of the transportation network or selected Origin- Destination (OD) pairs by installing several VMSs throughout our network? And finally, What are the costs and benefits of VMSs for all travelers or for specific OD pairs?