Designing a multi-stage transport system serving e-commerce activity

Abstract

In this paper, the author designs an e-commerce transport system, which covers the locations of producers’ facilities, distribution warehouses, and the business customers and deliveries among them. The study aims to identify the best locations for warehouses to increase efficiency in multi-stage transport systems. To reach this goal, the author revises distance metrics and suggests a methodological framework useful for warehouse location selection and practical applications. The empirical research is delivered by selecting a warehouse location using the maximal coverage model and mandatory closeness distance condition. After analyzing four warehouses’ alternatives, results are presented by applying various distance metrics. The results show that the selection of the location of the main warehouse depends on the level of returns that are defined by using the Mersenne Twister algorithm, and the distance calculation metrics representing differences in ranking. By the end of the study, the recommendation is given to apply the presented methodological approach for decision-makers seeking to improve service distances where decisions are made using path-based service distance criteria. The increase of efficiency is important from a policy development perspective, as findings of the study could help to reduce transport delivery costs for customers.