Demand dispersion and logistics costs in one-to-many distribution systems
When an organization decides on which groups of consumers it should target, the locations of these target consumers often play a role. Methods from the field of market segmentation are able to identify target groups with high benefit levels, but the expected costs of supplying products to the target groups are less well understood. These costs can play a large role if the locations of the customers, the demand locations, are geographically widely dispersed. This paper focuses on one-to-many distribution systems in which a central facility serves all demand points. We derive accurate logistics cost estimates from the dispersion of demand points for such systems, enabling a comparison of the expected logistics costs of different candidate target groups. The most accurate measure combines the average distance from the demand locations to a central location and the mutual distances between neighboring demand locations. The average of the distances between all pairs of locations forms a good alternative measure.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daganzo, Carlos F., 1988. "A comparison of in-vehicle and out-of- vehicle freight consolidation strategies," Transportation Research Part B: Methodological, Elsevier, vol. 22(3), pages 173-180, June.
- Chaug-Ing Hsu & I-Jin Tsai, 1999. "articles: Logistics cost, consumer demand, and retail establishment density," Papers in Regional Science, Springer, vol. 78(3), pages 243-263.
- Robuste, Francesc & Daganzo, Carlos F. & Souleyrette, Reginald R., 1990. "Implementing vehicle routing models," Transportation Research Part B: Methodological, Elsevier, vol. 24(4), pages 263-286, August.
- PEETERS, Dominique & THOMAS, Isabelle, . "Distance predicting functions and applied location-allocation models," CORE Discussion Papers RP -1458, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nagy, Gabor & Salhi, Said, 2007. "Location-routing: Issues, models and methods," European Journal of Operational Research, Elsevier, vol. 177(2), pages 649-672, March.
- Daganzo, Carlos F. & Newell, Gordon F., 1985. "Physical distribution from a warehouse: Vehicle coverage and inventory levels," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 397-407, October.
- Berens, Wolfgang, 1988. "The suitability of the weighted lp-norm in estimating actual road distances," European Journal of Operational Research, Elsevier, vol. 34(1), pages 39-43, February.
- Baita, Flavio & Ukovich, Walter & Pesenti, Raffaele & Favaretto, Daniela, 1998. "Dynamic routing-and-inventory problems: a review," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(8), pages 585-598, November.
- Turkensteen, Marcel & Sierksma, Gerard & Wieringa, Jaap E., 2011. "Balancing the fit and logistics costs of market segmentations," European Journal of Operational Research, Elsevier, vol. 213(1), pages 340-348, August.
- Brimberg, Jack & Love, Robert F., 1993. "Directional bias of the lp-norm," European Journal of Operational Research, Elsevier, vol. 67(2), pages 287-294, June.
- Michael Brusco & Douglas Steinley, 2007. "A Comparison of Heuristic Procedures for Minimum Within-Cluster Sums of Squares Partitioning," Psychometrika, Springer, vol. 72(4), pages 583-600, December.
- Frenkel Ter Hofstede & Michel Wedel & Jan-Benedict E.M. Steenkamp, 2002. "Identifying Spatial Segments in International Markets," Marketing Science, INFORMS, vol. 21(2), pages 160-177, July.
- Fleischmann, Bernhard, 1993. "Designing distribution systems with transport economies of scale," European Journal of Operational Research, Elsevier, vol. 70(1), pages 31-42, October.
- Bektas, Tolga & Laporte, Gilbert, 2011. "The Pollution-Routing Problem," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1232-1250, September.
- Figliozzi, Miguel Andres, 2009. "Planning approximations to the average length of vehicle routing problems with time window constraints," Transportation Research Part B: Methodological, Elsevier, vol. 43(4), pages 438-447, May.
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:223:y:2012:i:2:p:499-507. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.