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Thread: Centre of gravity method to locate new facility

  1. #1
    Join Date
    Nov 2017

    Default Centre of gravity method to locate new facility

    Hello everyone.. apologies for the inconvenience. I am student currently studying the operations and supply chain management course at Uni. I have an assignment which asks to calculate the location coordinates for a new distribution centre. As per my research, the factors considered under this method are volume, weight and distance but we have been given "number of trips per week" as a denominator. Although I have calculated, my problem is this could be a tricky question from the instructor. Any suggestion/help will be appreciated.

    A company would like to know where to locate itsí distribution center in a country in order to minimize its cost of deliveries. It has grouped the demand of all its customers in four regions.
    a) Given the data below, determine the location coordinates for its distribution center?
    Region 1 Region 2 Region 3 Region 4
    location coordinates (200,100) (30, 500) (400, 300) (60, 50)
    trips/week 10 20 30 10

  2. #2
    Forum Founder & Owner TopLink's Avatar
    Join Date
    Aug 2005
    Sydney, Australia

    Default Re: Centre of gravity method to locate new facility

    If you take the trips per week x the distance from the DC to each region you'll have total kms per week per region.
    You then need to work out the formula that will:

    Calculate the totals kms.
    Then move the DC 1000 km North and recalculate
    Move 1000 km South a recalculate, West, then East.
    Which ever is the smaller number. move the DC there, then recalculate using 500 km.
    Move to the location with the lowest kms and start again with 250 kms and so on.
    If you are good with Excel you can write a formula that will do the whole thing in one calculation.
    I had to do the same 25 years ago at University :-) And produce a map on the spreadsheet at the end!

    One thing to watch out for is getting trapped in a local minima.
    Your teacher can explain what that is.

    In reality you take into account more factors, but this is a good lesson to learn the principles.

    Top Link - Site Founder


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