A Research About The Density Of Store When Delivery To The Dispersive Market

From the start of "The Project of Support Rural Stores", the leading enterprises in Jilin Province have been always in the state of lost when delivery to the rural stores. On the one hand, the leading enterprises in the Northeast of China reduced the initial investment costs, but on the other hand, the delivery cost was raised. Although the financial support from the government has reduced initial investment while the enterprises enter the rural market, a high exit barriers was build at the same time ,for there was the policy constraints and the delayed payment. Well, under the current policy, to the leading enterprises in the Northeast, what is the right way to reasonably expect future profitability? How to reduce delivery cost, improve the level of profits, develop the rural market and maintain long-term competitive advantage in the rural market in Northeast? At this stage, these questions are so important that the leading enterprises in the Northeast should require them in serious.From the position of the leading enterprises, the study attempted to make the impact of policy of " The Project of Support Rural Stores " as an important factor to the decision of the leading enterprises, pay attention to the density of rural stores, the density could make the profit of leading enterprises equal to the lost of it when delivery to the rural stores in Northeast. Then, analyze the advantages and challenges existed, and based on the analysis, give the advice to the leading enterprises: How to use the financial support form the government; How to make the developing plan about delivering to the rural stores in Northeast; And how to improve their income. The significance of this study is: 1. To help the leading enterprises in Northeast make an objective assessment of the impact form the policy, find which is the key factor that impact the leading enterprises get profits, use the resources of the leading enterprises, change the factors that the enterprises could change and get the profit when delivery to the rural stores as soon as possible form the way we have said. 2. It is useful to the leading enterprises to expand the way of calculate the average delivery cost of a single commodity and analyze the way of calculate the average delivery cost of a bound of commodities.3. To a certain extent, the results of the study also will be useful to the government, let the government know the real profit and cost of the leading enterprises when they delivery to the rural stores. The information of the real profit and the cost of the leading enterprises will give the government a foundation to adjust the policy named "The Project of Support Rural Stores ".Existing research shows that in the current market conditions, there is he reasonability for the leading enterprises enter the rural market with the support of the government. But the also have to faces many problems. One of the most important is the problem of excessively high delivery costs. The main reason of this problem is the low density of the rural stores in Northeast, to the leading enterprises in Northeast, the density is lower than which the profit of the enterprises equal to the lost of them. To calculate the density, we need to calculate the average delivery cost and average earning of the leading enterprise. The research of Burns et. al has shown that the delivery cost of the enterprises is consisted of the average inventory cost and the average transportation cost, and then, they established the model to calculate the delivery cost. On the basis, this study made the following assumptions: 1.Do not consider the operating costs of the leading enterprises, just concerned with the delivery cost, which is related to the delivery to the rural stores. Then, the borderline of the density could be deduced. 2. All of the delivery cost is the cost of the leading enterprises. 3. The demands of each rural store in each distribution are the same. 4. The routes of the delivery are the optimal design under the existing conditions. 5. Every rural store will be involved in the delivery. 6. Every time, the vehicles could get a full load. 7. The same car load. With these assumptions, we established the basic model: P×r=PR(V nq+T) +(γ+αD+σn) V.Operate the formula, we get the borderline of density:ρ= n / D. After determine the model, we analyzed the condition of sub-regions there are rural stores which need the commodity delivery from the X enterprises, obtained the borderline of density in every sub-regions with different size. At last, we compared the borderline of density with the actual density and get some conclusion.Through the compare of the borderline of density with the actual density, and connected the interview, we found that face to " The Project of Support Rural Stores ", there are several obvious contradictions when the leading enterprises in Northeast decide whether enter the rural market, as the following: 1. the contradiction between the low initial investment costs to the high delivery costs. 2. The conflict of the advantage of a first-mover and the longer term of loss. 3. The contradictions between improve service levels and reduce costs . 4. The conflict of social responsibility and the loss of the leading enterprises. In addition, leading enterprises faced with some other issues. Such as the impact of fake and shoddy commodities, which made the commodity delivered by the leading enterprises can not be sold, the health and quarantine departments increased pressure on rural store owners, the emergence of dissatisfaction with the leading enterprises, and so on.Faced with this contradiction, the leading enterprises in Northeast should adjust their delivery strategy to the rural stores accordingly. 1. Measure of the cost of logistics in reasonable, make sure the borderline density of rural stores in every sub-region. 2. Make different services strategy for each sub-region. 3. Appropriately increase the advantages of high-margin merchandise in the sub-regions which have stronger consumption power. 4. Guarantee product quality and service levels, to reduce distribution costs as far as possible.Because of the plight of the leading enterprises in Northeast, government need to adjust the policy also, when continue to implement the" The Project of Support Rural Stores ". 1. Take the funds from the areas with the high store density to the areas with low store density gradually. Transfer the number of stores to the low-density areas. Extend policy support to the areas with underdeveloped economic, help leading enterprises spent loss period as soon as possible. 2. Increase the numbers of the stores and extend the time, to the low density areas, the useful means is increasing the numbers, rather than increasing the standards of subsidy for each store. 3. Make sure the flexibility of the standard in the policy, make different standards according to the different income of the farmers and the different size of the leading enterprises. In addition, government departments should cooperate with each other to support the delivery of the leading enterprises.