Study On Application Of Multiple Location Seeking In A Company Based On The Gravity Model

After China became the member of WTO, many multinational retailing businesses flock intoChina. They set up their own retailing network. During the process, especially the process ofdistribution center construction, they must solve a wide variety of problems, such as warehousestorage capacityand address choice. No doubt, these questions are very important, in terms of theoperation costs and running efficiency, as DC is the core of the whole network, it connectssuppliers and stores together. The justification of the decision will not only influence the retailingnetwork operation directly, but also decide its future development and road map.In theory introduction part, the paper presents the theory development in history. Then, it tellsabout the DC’s definition, function, operation modes and category, highlighting the factors in DClocation selection.In core study part, the gravity center as a main site selection method is introduced. It ispointed out that the method has its advantage over other methods but is limited to single locationselection because of history study base. Following this the paper introduces the latest study trendof gravity method and its trend of blending with other methods and sciences.In the end, the single site selection method is applied in company A’s case, integrated withproducts and sales characteristics. However, the method is modified to meet the need ofmulti-location. The improved gravity model is developed based on the heuristic algorithms withthe minimum total cost as its object function. The model proves to be effective in case of companyA’s location selection. The model and algorithm is of reference value to optimize distributioncenter multi-location problem.