Research On Distribution Centers Location With Lateral Transshipment

With the development of society and economy, the uncertainty of customers’demand has increased. Meanwhile, the competition among enterprises and supply chains highlights the importance of supply chain collaboration. In logistics system, distribution centers serve as the bridge connecting the provider and customers. The location of distribution centers has great influence on the efficiency of the whole supply chain. The location problem of distribution centers is a hotspot in the location research area.In face of the unpredictable demand, the distribution system had better centralize safety stock to share the risk of shortage. However, the redistribution of centralized inventory must be solved, in order to complete the process of distribution centers. Lateral transshipment may incur transport costs, but it can effectively reduce the stock level, share the risk of shortage of distribution system. What’s more, lateral transshipment will save inventory costs to a certain extent. By introducing lateral transshipment, the distribution system can enhance coordination and centralized management of inventory.The research background, methods and contents are briefly introduced. Then the related researches are reviewed in detail. The researches include the models and methods about facility location, location of distribution centers, inventory controlling, and lateral transshipment. A location model of distribution centers considering lateral transshipment is presented. For the characteristic of this model, genetic algorithm is adopted. With a computational experiment, it is proved that lateral transshipment does have an impact on the location costs. And the impacts of safety factor and demand variance on location strategy are discussed.First of all, both strategic and tactical strategies are taken into account simultaneously. With good theoretical and application value, this article is based on the existing location research results of distribution centers. And facility location, allocation of retailers, centralized inventory and lateral transshipment are included in one model.Secondly, the paper proposes the distribution centers location model with lateral transshipment and improves genetic algorithm. In order to avoid prematurity and improve the quality of the individuals, elite strategy is applied to genetic manipulation. A random-elite strategy and roulette wheel selection to choose colony, a two-point cOrossover-elite strategy are elaborately designed. Through the analysis of specific examples and calculations, the validity and practicability of the model and algorithm are proved.Finally, based on the research achievements of this paper, valuable suggestions are put forward. If distribution centers location combined with transportation, inventory controlling and redistribution, the location result will become more scientific and reasonable. Distribution centers should not pursue incitement excessively. Centralized inventory and lateral transshipment would be adopted when the service level is high or demand variance is big. What’s more, the collaboration between distribution centers should be strengthened.