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A supplier to the electric utility industry produces power generators. The Transportation costs are high. One market area includes the lower part of the Great Lakes region and the upper portion of the southeastern region. More than 600,000 tons are tobe shipped to eight major customer location, as shown in the table below. What is the center of gravity (centroid) for the electric utilities supplier?

(CUSTOMER LOCATION) (TONS SHIPPED) ( X.Y COORDINATES)

Three rivers, MI 5,000 (7,13)

Fort Wayne, IN 92.000 (8,12)

Columbus, OH 70.000 (11,10)

Kingsport, TN 35.000 (11,7)

Akron, OH 9.000 (12,4)

Wheeling, WV 227.000 (13,11)

Roanoke, VA 16.000 (14,10)

153.000 (15,5)

Solution

The center of gravity (centroid) for the electric utilities supplier x* and y* are

Sl_i = 5 + 92 + 70 + 35 + 9 + 227 + 16 + 153 = 607

Sl_ix_i = 5(7) + 92(8) + 70(11) + 35(11) + 9(12) + 227(13) + 16(14) + 153(15) = 7,504

Sl_iy_i= 5(13) + 92(12) + 70(10) + 35(7) + 9(4) + 227(11) + 16(10) + 153(5) = 5,572

x*= Sl_ix_i/ Sl_i

= 7504/607

= 12.4

y*= Sl_iy_i/ Sl_i

= 5572/607

= 9.2

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9505961

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