Abstract
The location of distribution centres for online retailers has become an important issue for many companies. The operation of the distribution centre for e-commerce seems to be different from the traditional concept of distribution centres. This study considers how the location of distribution centres are designed and operated for online retailing using a computer simulation with actual data. This paper analyses current issues in order to propose an effective location for e-commerce distribution centres. An effective location for a multi-distribution system over a wide geographical area is required. This paper clearly points out the importance of locating e-commerce distribution centres over a wide geographical area by performing a computer simulation using actual data on the assumption that online resale business customers live in a metropolitan area. The study created a business model in which a buffer warehouse, which primarily handled commodities with high-frequency shipments, was located near a large consumption area and was used in addition to a large-scale distribution centre. The validity of the created business model was verified by performing a simulation based on actual data. The result revealed that these recommended improvement measures for the location of e-commerce distribution centres can function effectively.
Highlights
IntroductionIn the case of retailing, it is believed that there is little difference between the logistic system requirements for online resale businesses and brick-and-mortar companies
In the case of an online resale business where commodities are delivered to the Tokyo metropolitan area from a unified logistical base, if the base is located at a longer distance from the Tokyo metropolitan area, the delivery cost from the base to the Tokyo metropolitan area will be higher than it would be if the delivery distance was shorter
To minimize the total distribution cost for delivering commodities to customers in the Tokyo metropolitan area, this study found that the first distribution centre should be used to some extent and the second distribution centre should be located near the Tokyo metropolitan area
Summary
In the case of retailing, it is believed that there is little difference between the logistic system requirements for online resale businesses and brick-and-mortar companies. This study examines the strategies required to effectively locate distribution centres for an online resale business and deliver goods from those centres to each customer by modelling a logistics system and measuring its improvements using a computer simulation. The online resale business reached customers all over Japan, but its logistical base was located in the Chubu district and commodities were delivered to East and West Japan. The delivery cost is higher when using a physical distribution base in the Chubu district than when using a distribution warehouse in a place near the Tokyo metropolitan area. If a large-scale warehouse is located near the Tokyo metropolitan area, the delivery cost of a commodity to West Japan increases
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
