I have given some examples of methods to determine the location of a business. The first method is the ranking procedure. And the second method is to break-even analysis. Now, I will try to explain about a third method, the center of gravity. Center of gravity method is a mathematical technique used to find the distribution center location that will minimize costs. This method is used to determine the location of the market, the volume of products that will be in transport to the market and shipping costs in finding the best location for distribution centers. Equations used in this method are :
Example Problem :
A department store has branches in four locations : A, B, C and D. Department Store has a Ware House at D and plans to seek the central location of the new house ware. Previously, it has been determined in advance the coordinates of 0.0. Store locations in A (30.120); D (130, 130), C (90, 110) and B (60.40). Total demand for containers every month for A (2000); D (1000), C (1000) and B (2000). Location A has coordinates d (1, x) = 30, d (1, y) = 120, and W1 = 2000. By using equations Center of gravity is obtained the desired central location.
Graphs Analysis :
Originally Posted at Arif Info.