Research On Distribution Center Location Of Zhejiang Hemei Rural Supermarket Chains

To continue to further the strategic adjustment of economic structure and fosterthe healthy development of the national economy, the Eighteenth CPC NationalCongress proposed "firmly grasp the strategic basis of expanding domestic demand",in order to boost the development of the domestic consumer market and build a soundcommercial and trading circulation system. Therefore, the broad rural market with itshuge potential, has become an important option in the new period of "expandingdomestic demand strategy". To improve the layout of urban functions and promote thedevelopment of rural market, modern service facilities like supermarket chains anddistribution centers etc., which has become the new focus of urbanization in theplanning and construction of parts, will be actively developed. On this basis, ruralsupermarket chains, as a new retail organization rendering specialized service forrural market and under the support of the Market Project of "Ten Thousand Villages"proposed by Ministry of Commerce, have gain access to the key supports ofgovernment at all levels and been experiencing rapid growth and a new roundexpanding.Targeting at rural consumer markets flowing in two directions with decentralizeddemands in vast areas, the business environment in rural supermarket chains, whoseservice radius is longer and distribution route more complicated-which causes adysfunctional distribution system on a regular basis-are quite different comparing tothat in urban supermarket chains. The distribution system in rural supermarket chains,which raises its distribution cost and pressure in efficiency and therefore seriouslyundermines its competitiveness in the market, needs optimization to overcomeobstacles in the development of rural supermarket chains. The core of the distributionsystem, distribution center, bears the distribution tasks in rural supermarket chains.Distribution center location defines investment scales as well as distribution serviceallocation and has a significant impact on distribution cost and efficiency directly. Thus, a scientific distribution center location is the solution to the distribution problem inrural supermarket chains.This paper mainly studies the distribution center location of Zhejiang Hemeirural supermarket chains by researching the theory in supermarket chains’ distributioncenter location and analyzing the distribution system in Hemei Supermarket. Firstly,an optimized distribution system consisting of" regional procurement warehousingcenter-city distribution center-township chain store-village franchise" is produceddouble-sided under the Status quo of numerous chain stores scattered, return logisticsneeded and operation in distribution center pressed. Then, a deeper research on thelocation of city distribution center, which plays a central role in the system, is carriedon. A Bilevel Programming Location Model is established with an upperprogramming for seeking the minimum total cost in distribution and a lowerprogramming for achieving the maximum satisfaction in township chain store’s timeconcern. In order to meet the model’s objective, Branch and Bound Method is appliedto seize the best option. Lastly, an empirical research on the distribution centerlocation of Hemei Supermarket is made in Anji, Deqing and Lin’an to prove thevalidity of the Bilevel Programming Model and Branch and Bound Methodestablished.