A hypothetical retail chain has 22 distribution centers throughout the United States, to supply to more than 4,300 customers. It has divided the customers into more than 200 market areas, shown by the smaller polygons in the map at left. However, the company wants to determine if there is a more efficient scheme for supplying the market areas from the distribution centers. With the help of a Network Dataset of roads, each customer is allocated to the ideal distribution center.
In this study, we did not want to go to the trouble to reassign the individual customers to the distribution centers, so we looked at a way to reassign the market areas, based on if the majority of customers within each market area had been reassigned to a new distribution center. If the majority are better served by a new distribution center, all of the customers within a market area will be reassigned. We had only a few market areas (less than a dozen) of the 227 total reassigned. This scheme does not insure that every single customer is being served by the nearest distribution center, but it does make for less reorganization for the company in terms of reassigning customers to new distribution centers.
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