Optimal Location for Wholesalers |
Location-allocation analysis can be modeled in a number of different ways. This analysis is answering the question: where should a wholesaler be located to minimize overall transportation costs to retailers? Facilities are chosen such that the sum of weighted impedance (demand allocated to a facility multiplied by the impedance to the facility) is minimized.
The five most optimal locations for wholesale establishments depending on the travel time to retail stores in Helsingborg municipality, Sweden, are shown. Retail stores' importance are weighted depending on size (number of employees). A retail store’s demand weight is allocated to the nearest facility only. A 2 km buffer around the optimal locations is shown. The connections between wholesalers and retailers are displayed by straight lines for clarity, but in actuality they are calculated using travel times by car and hence follow the road network |
In the overall project, location-allocation analysis is used in order to find the wholesale stores that are optimally located depending on the location of the demand and the travel time to the demand. It takes into consideration that transportation costs is an important factor for wholesale firms and minimizing the travel time to the demand could influence the survival of wholesale firms. There are three different types of demand points in this analysis: (i) retail stores, (i) manufacturing firms and population centers. A number of wholesale establishments are chosen as optimally located by the analysis. Those establishments as well as those locations are analyzed. Did they grow? Did more wholesale stores cluster there over time? Where is it optimal to locate a wholesale establishment to minimize impedance and maximize coverage?
This project is sponsored by HUR, the Swedish Retail and Wholesale Development Council.
This project is sponsored by HUR, the Swedish Retail and Wholesale Development Council.