An Integrated Method for Locating Logistic Centers in a Rural Area

Abstract

Transport has long been considered a concern for rural residents around the world. Rural express logistics, one of the transport topics, is associated with rural residents’ convenience as well as e-commerce development. As key nodes in the network, logistic centers need to be properly located to improve the delivery efficiency. This paper provides an integrated method for locating logistic centers which is of strong feasibility: on one hand, the proposed method seeks to maximize coverage of express service; on the other hand, considerations are given to operational profitability of the centers, ensuring overall viability for the plan. Specifically, the Holt–Winters model is used for demand prediction. Total predicted demand is then allocated to each town according to population, gross regional product, and some other indicators. A maximal covering model is applied to select logistic centers based on demand under different service radius and numbers of logistic centers. Revenue evaluation is then conducted for the selected logistic centers to evaluate their future operating conditions. The proposed method is applied in rural areas in Lhasa, China. Numerical analysis suggested that 12 of the selected 22 logistic centers could make a profit by 2025. Finally, policy recommendations are given for the development of rural logistic systems.