On location design model of beverage vending machines: Its performance analysis by purchasing behavioral and distribution design models

Tetsuya Sato, Hiroshi Katayama

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Vending machine, whose share in the total sales exceeds 30% among beverage industries, is an important sales channel in Japan. However, in recent years, the sales amounts in some cases are insufficient for paying their maintenance and distribution costs, due to the decline by expanding sales of other channels, e.g. convenience stores and super markets. For this reason, effective ways to stimulate potential demand are required among the industries that manage beverage vending machines. By contrast, installation and removal costs of vending machines are greatly lower than other general retails; therefore, to improve profitability by reallocation of vending machines is relatively easy. Nevertheless, sales amounts of plural vending machines depend on others mutually. Thus, only installation of new vending machines or reallocation of worse seller to high demand area are ineffective to improve profitability. Furthermore, reallocation of vending machines occurs the change of distribution cost. For solving these problem, this paper proposed the exploration model of the optimum locations in the objective commercial area for maximizing profitability with consideration of the interaction between sales amounts of each vending machine based on Huff's purchasing behavioral and distribution design models. Moreover, its performance is analyzed by simulation experiments with assistance of genetic algorithm. From the result, total sales amount after reallocation based on the proposed model is slightly increased and the profit of the inter distribution network is improved 1.3% from the initial locations, despite the distribution cost is increased. Thus, it is demonstrated that the proposed allocation model of beverage vending machines functionates effectively.

Original languageEnglish
Title of host publicationProceedings - 47th International Conference on Computers and Industrial Engineering
Subtitle of host publicationHow Digital Platforms and Industrial Engineering are Transforming Industry and Services, CIE 2017
PublisherCurran Associates Inc.
ISBN (Electronic)9780000000002
Publication statusPublished - 2017 Jan 1
Event47th International Conference on Computers and Industrial Engineering: How Digital Platforms and Industrial Engineering are Transforming Industry and Services, CIE 2017 - Lisbon, Portugal
Duration: 2017 Oct 112017 Oct 13

Other

Other47th International Conference on Computers and Industrial Engineering: How Digital Platforms and Industrial Engineering are Transforming Industry and Services, CIE 2017
CountryPortugal
CityLisbon
Period17/10/1117/10/13

Keywords

  • Demand Stimulation
  • Distribution Route Planning
  • Genetic Algorithm
  • Huff Model
  • Locational Optimization
  • Simultaneous Design
  • Vending Machine

ASJC Scopus subject areas

  • Computer Science(all)
  • Control and Systems Engineering
  • Electrical and Electronic Engineering
  • Industrial and Manufacturing Engineering
  • Safety, Risk, Reliability and Quality

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  • Cite this

    Sato, T., & Katayama, H. (2017). On location design model of beverage vending machines: Its performance analysis by purchasing behavioral and distribution design models. In Proceedings - 47th International Conference on Computers and Industrial Engineering: How Digital Platforms and Industrial Engineering are Transforming Industry and Services, CIE 2017 Curran Associates Inc..