The real wordsTheory
The centre-of-gravity method
Centre-of-gravity methodFinds the location of a distribution centre that minimises distribution cost, considering the location of markets, the volume of goods shipped to them, and shipping cost or distance.
x-bar = SUM(xi x wi) / SUM(wi)
y-bar = SUM(yi x wi) / SUM(wi)
Three steps: establish a grid map of the area keeping relative distances; identify coordinates and weight shipped for each location; compute the coordinates of the centre of gravity.