A Study Of Allocation Problem Based On Demand Forecasting For Enterprise's Distribution Center

With the rapid development of the word trade, information network technology and economic globalization, logistics gains more and more concern as "the third profit source". Simultaneously logistics distribution center comes into existence with the increase of business portfolio. Logistics distribution center connecting manufacturers with clients plays an important role in logistics network, which usually performs several major functions: collecting, distributing and delivering goods. It can meet clients'demand by ordering, stockpiling, distribution, transportation, accounting and information service. It also influences the service quality and efficiency of logistics system.Allocation of logistic distribution center is a crucial section that should be considered during the process of construction. A good allocation for distribution center is highly advantageous to the fast and effective circulation of product and also could optimize the functional layout of city. It also strengthens the function of carrier of city and promotes the cooperation between production and expense, so as to assure balanced development of the whole logistic system. This paper tries to propose an allocation model based on forecasting demand. Demand is an important factor to determine the scale of logistics distribution center since the enterprise which is going to build distribution center is always in its early stage of entering market. In fact, the demand changes with time, economic development and business portfolio of corporations, so the distribution center has to be enlarged to satisfy the increasing demand. However, the increasing demand is unknown, it is necessary to forecast it by the history data.Firstly, a combinative forecasting model composed of Grey system model and Markov chain model is constructed in this paper to improve the precision of demand forecasting of the system including uncertain information and data with limited sample. Then the allocation model is built based on above demand forecasting and some key factors that affect location. The goal of this model is to minimize the cost including transportation, distribution, management and other cost. The optimized model is to find the best location for distribution center among several candidates, which could minimize the total cost of logistics system.Finally, a real example of X Company is used to verify the precision of demand forecasting and allocation feasibility using this model. Also I summarized the whole paper and proposed for the future research work in this field at the end of the paper.