Center Of Gravity Method Flashcards, test questions and answers

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What is Center Of Gravity Method?

The Center of Gravity Method is an important technique used to find the optimal locations for facilities in a supply chain network. It is a quantitative tool used to determine the best site or sites for locating production, distribution and warehousing operations within a given geographical area. The Center of Gravity Method considers factors such as transportation distances and costs, customer concentrations, resources availability, labor costs and other related criteria when selecting optimum facility location(s). This method was first proposed by Johann Heinrich von Thünen in 1826 (Thurston 1980). Von Thünen argued that allocating resources near the center of their market pulls would reduce the cost associated with transporting goods from one place to another. He suggested that it should be possible to calculate exactly where these centers are located through mathematical methods. The Center of Gravity Method uses an algorithm based on measured distance between two points multiplied by their demand at those points (Coyle et al., 2016). Using this formula, it computes the center point which has minimum total transport costs among all possible combinations of locations considered. This process is done iteratively until an optimal solution is identified. There are several advantages associated with using this method for determining facility location: Firstly, it takes into account many different factors including transportation distances and costs; secondly, it provides a practical way to find multiple solutions quickly; thirdly, its application allows users to adjust weights assigned to each factor so that they can customize results according to their specific requirements; lastly, its implementation does not require complex software or computers only basic algebraic skills are required for calculation purposes. In conclusion, the Center Of Gravity Method plays an integral role in finding the most suitable locations for facilities within a supply chain network.