Question

The center of gravity method determines the best x and y coordinates for multiple faclities by finding a central location and then assigning the facilities around the periphery of that location. True or false?

Answer 1

Answer:

The answer is True.

Explanation:

The center of gravity method is a concept under Operations Management as it relates to facilities distribution such as warehouses or fulfillment centers.

Center of Gravity Strategy/Method is defined as a concept that seeks to calculate geographic coordinates for a potential single new facility that will minimize costs. Under this approach the main factors considered are:

• Cost of Shipping
• Markets
• Volume of goods shipped

Operations managers prefer to use this approach in siting the location of their facilities because:

• It minimizes cost.
• It is simple to compute
• It takes in to consideration existing facilities

How to use the Center of Gravity Method

Step 1:

• Place existing facility(ies) such warehouse, fulfillment center, and distribution center locations in a coordinate grid.
• situate the grid on an ordinary map.
• The distances between the facilities must be noted.

Step 2:

Then, using the equations below,

   Fx= ∑ dix Vi/ ∑ Vi

   Fy= ∑ diy Vi/ ∑ Vi

Proceed to calculate the X and Y coordinates using these equations where Fx is the X (horizontal axis) coordinate for the new facility, and

Fy is the Y (vertical axis) coordinate for the new facility, dix is the X coordinate of the current location, diy is the Y coordinate of the existing location, and Vi is the volume of goods moved to or from the ith location.

Step 3:

After you have obtained the X and Y coordinates place that location on the map.

This approach allows for point of departure – or, literally, a starting point of where (from the perspective of longitude and latitude) you options are for where to grow your fulfillment or logistics network.

Cheers!