A credibility-based fuzzy location model with Hurwicz criteria for the design of distribution systems in B2C e-commerce

  • Authors:

  • H. C. W. Lau;Zhong-Zhong Jiang;W. H. Ip;Dingwei Wang

  • Affiliations:

  • School of Management, University of Western Sydney, Sydney, Australia;Department of Management Science and Engineering, School of Business Administration, Northeastern University, Shenyang 110004, China;Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong;Department of Systems Engineering, School of Information Science and Engineering, Northeastern University, Shenyang 110004, China

  • Venue:
  • Computers and Industrial Engineering
  • Year:
  • 2010

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Abstract

Facility location problem is one of the most critical elements in the design of distribution systems, and numerous studies have focused on this issue. However, facility location theory and guidelines for B2C firms are sparse. In this paper, with regard to the customer characteristics peculiar to B2C e-commerce and the turbulence of the competitive market, a new fuzzy location model is proposed to optimize the distribution system design in B2C e-commerce. The model adopts a hierarchical agglomerative clustering method to classify customers and estimate the fuzzy delivery cost. At the same time, due to the turbulence of competitive market, both market supply and customer demand are treated as fuzzy variables in the model. Afterward, the credibility measure and Hurwicz criterion are introduced to convert the model into a crisp one which has NP-hard complexity. In order to solve the crisp model, an improved genetic algorithm with particle swarm optimization is developed. Finally, the computational results of some numerical examples are used to illustrate the application and performance of the proposed model and algorithm.