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Part Two
Design
Figure 6.7 Centre-of-gravity location for the garden centre warehouse
and
where
x i = the x coordinate of source or destination i
y i = the y coordinate of source or destination i
V i = the amount to be shipped to or from source or destination i.
H =
∑y i V i
∑V i
Each of the garden centres is of a different size and has different sales volumes. In
terms of the number of truck loads of products sold each week, Table 6.3 shows the sales
of the four centres.
Table 6.3 The weekly demand levels (in truck
loads) at each of the four garden centres
Sales per week
(truck loads)
Garden centre A 5
Garden centre B 10
Garden centre C 12
Garden centre D 8
Total 35
In this case
and
(1 × 5) + (5 × 10) + (5 × 12) + (9 × 8)
G = = 5.34
35
(2 × 5) + (3 × 10) + (1 × 12) + (4 × 8)
H = = 2.4
35
So the minimum cost location for the warehouse is at point (5.34, 2.4) as shown in
Figure 6.7. That is, at least, theoretically. In practice, the optimum location might also be
influenced by other factors such as the transportation network. So if the optimum location
was at a point with poor access to a suitable road or at some other unsuitable location
(in a residential area or the middle of a lake, for example) then the chosen location will need
to be adjusted. The technique does go some way, however, towards providing an indication
of the area in which the company should be looking for sites for its warehouse.