PRODUCTIONS/OPERATIONS MANAGEMENT .
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Vi = i-
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Example of Center of Gravity Method
Question: What is the best location for a new Z-Mobile warehouse/temporary storage facility considering only distances and quantities sold per month?
Center of gravity method example
/ / Several automobile showrooms are located according to the following grid which represents coordinate locations for each showroom.
X
Y
A
(100,200)
D
(250,580)
Q
(790,900)
(0,0)
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Location Planning and Analysis
Determining Existing Facility Coordinates
To begin, you must identify the existing facilities on a two-dimensional plane or grid and determine their coordinates.
You must also have the volume information on the business activity at the existing facilities.
X
Y
A
(100,200)
D
(250,580)
Q
(790,900)
(0,0)
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You then compute the new coordinates using the formulas:
Z


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Lauderdale factory to Boston warehouse
Des Moines
Total demand
Location Planning and Analysis

First, $3 is the lowest cost cell so ship 100 units from Des Moines to Cleveland and cross off the first row as Des Moines is satisfied
Factory capacity
Location Planning and Analysis

Second, $3 is again the lowest cost cell so ship 100 units from Evansville to Cleveland and cross off column C as Cleveland is satisfied
Factory capacity
Location Planning and Analysis

Third, $4 is the lowest cost cell so ship 200 units from Evansville to Boston and cross off column B and row E as Evansville and Boston are satisfied
Factory capacity
Location Planning and Analysis

Finally, ship 300 units from Albuquerque to Fort Lauderdale as this is the only remaining cell to complete the allocations
Factory capacity
= $4,100