Centre of Gravity Method:

This is a mathematical technique utilized for finding the location of a distribution centre that shall minimize distribution costs. The method regard as the location of markets, the volume of goods shipped to those markets, shipping cost, etc. for determining the best location.

The basic steps for the centre of gravity method are following:

a) Place the location on a coordinate system. The origin of the coordinate system and the scale utilized are arbitrarily selected.

b) The centre of gravity is determined by using the following equation :

where,

C_x = x-coordinate of the centre of gravity,

 C_y = y-coordinate of the centre of gravity,

d_ix = x-coordinate of location i,

d_iy = y-coordinate of location i, and

V_i = Volume of goods moved to or from location i.

The Transportation Method

It is one of the simplest methods for the selection of layout and uses the linear programming. The aim of this model is to find out the best pattern of shipments from several points of sources to many points of destination so as to minimize the total production and transportation