Determining optimal convenient store location in logistics network with consideration of transshipment cost

In recent years, companies have broadened their competitions in different directions such as distribution, customer service, and retailing. Therefore, different retailing formats appear in the market increasingly and the convenient store becomes one important format among them. To achieve better performance of the logistic network, selecting suitable convenient store location is a pertinent decision for companies. In the selection of convenient store locations, optimal facility locations with consideration of consumers´ behavior and competition can be achieved using mathematical programming. However, transshipment cost is assumed to be the summation of material flow time distance between each convenient store and distribution center in these model that did not perceive the impact of vehicle routing in shipping product from distribution centers to convenient stores in reality. Hence, this research develops a three-echelon logistic model with the inclusions of competition, consumers´ behavior, and vehicle routing to determine the optimal convenient store location and transshipment route. The results show that the inclusions of competition and vehicle routing will have significant influences on achieving optimal convenient store location.