a supplier to the electric utility


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

 

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

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

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

                                                       

x*= Sli xi / Sli

     = 7504/607                                                

     = 12.4

 

y*= Sli yi / Sli

    = 5572/607

     = 9.2                                                 

 

 

 

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Accounting Basics: a supplier to the electric utility
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