Location Model for Distribution Centers for Fulfilling Electronic Orders of Fresh Foods under Uncertain Demand

Hao Zhang,Chongchong Qu,Ying Xiong,Mingke He

doi:10.1155/2017/3423562

Abstract

The problem of locating distribution centers for delivering fresh food as a part of electronic commerce is a strategic decision problem for enterprises. This paper establishes a model for locating distribution centers that considers the uncertainty of customer demands for fresh goods in terms of time-sensitiveness and freshness. Based on the methodology of robust optimization in dealing with uncertain problems, this paper optimizes the location model in discrete demand probabilistic scenarios. In this paper, an improved fruit fly optimization algorithm is proposed to solve the distribution center location problem. An example is given to show that the proposed model and algorithm are robust and can effectively handle the complications caused by uncertain demand. The model proposed in this paper proves valuable both theoretically and practically in the selection of locations of distribution centers.

Highlights

In recent years, customers have enjoyed the fast delivery of fresh goods and foods through the rapid development of electronic commerce
In addition to the general assumptions described above, this paper considers the following specific assumptions that the fresh goods e-commerce enterprises operate in a specific period of time: (1) Fresh goods e-commerce enterprises prefer to rent the distribution centers from the existing candidate distribution centers and avoid the choice of constructing them
In real life, there is a great deal of uncertainty in the demand for fresh goods, so we need to use a robust optimization method to optimize the selection of locations for distribution centers

Summary

Introduction

Customers have enjoyed the fast delivery of fresh goods and foods through the rapid development of electronic commerce. The location of distribution centers is of great importance during the design of the distribution network center because of the perishable nature of fresh food [3]. Companies can build or rent distribution centers in a targeted area by analyzing market demand to improve the locations of the distribution network center and to reduce cost. Once the size and location of the distribution center are determined, it will not change for a certain period of time, but the customer demand of fresh goods may change. An important issue that arises while designing a distribution network is coping with the uncertainty of demand [4].

Related Literature Review

Model Building and Solution Method

Result

Computational Results

Conclusions