Design and analysis of the location of an online resale business distribution centre in Japan

Abstract

The location of distribution centres for online retailers has become an important issue for many companies. The operation of the distribution centre for e-commerce seems to be different from the traditional concept of distribution centres. This study considers how the location of distribution centres are designed and operated for online retailing using a computer simulation with actual data. This paper analyses current issues in order to propose an effective location for e-commerce distribution centres. An effective location for a multi-distribution system over a wide geographical area is required. This paper clearly points out the importance of locating e-commerce distribution centres over a wide geographical area by performing a computer simulation using actual data on the assumption that online resale business customers live in a metropolitan area. The study created a business model in which a buffer warehouse, which primarily handled commodities with high-frequency shipments, was located near a large consumption area and was used in addition to a large-scale distribution centre. The validity of the created business model was verified by performing a simulation based on actual data. The result revealed that these recommended improvement measures for the location of e-commerce distribution centres can function effectively.

Keywords

• Distribution centres
• online resale business
• buffer warehouse
• ABC analysis
• transportation planning