Retail and Depot Location

  • Graham Buxton


It is evident that a system designed to move a company’s products from points of production to points of consumption must provide facilities for the holding of stock in order to equalise supply and demand, and thus overcome what we have previously referred to as the discrepancy of assortments’. There are two broad classes of such facilities characteristic of marketing logistics systems: break-bulk and reassembly facilities, and shopping facilities. The first class includes distribution depots, or warehouses, situated at strategic points within the physical distribution system with respect to (1) the location of a company’s manufacturing facilities and (2) the location and patterns of purchasing behaviour of the company’s customers. The second class may be redefined as retailing facilities, and here a company is concerned with decisions about the types of retail outlet most suitable for its products, and which particular outlets to distribute through. Thus, location lies at the heart of the marketing logistics decision process.


Shopping Centre Demand Point Retail Outlet Shopping Behaviour Shopping Trip 
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Notes and References

  1. 1.
    Frank H. Mossman and Newton Morton, Logistics of Distribution Systems (Boston: Allyn & Bacon Inc., 1965) p. 226.Google Scholar
  2. 2.
    W. Christaller, Die Zentralen Orte in Süddeutschland (Jena: Gustav Fischer, 1933).Google Scholar
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    Bernard J. La Londe, ‘The Logistics of Retail Location’, in American Marketing Association, Social Responsibilities of Marketing (Chicago: AMA, 1961) pp. 567–75.Google Scholar
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    This name was given to the method by Ralph Towsey, ‘Finding the Right Site’, Marketing (June 1972) pp. 41–3.Google Scholar
  5. 5.
    David L. Huff, ‘Defining and Estimating a Trading Area’, Journal of Marketing, vol. 28 (July 1964) p. 34.CrossRefGoogle Scholar
  6. 6.
    W. J. Reilly, ‘Methods for the Study of Retail Relationships’, Bureau of Business Research Monograph no. 4 (Austin: The Universtiy of Texas, 22 Nov. 1929); also W. J. Reilly, The Law of Retail Gravitation (Austin: The University of Texas, 1931).Google Scholar
  7. 7.
    P. D. Converse, ‘New Laws of Retail Gravitation’, Journal of Marketing, vol. 14, no. 3 (Oct. 1949) pp. 379–80.CrossRefGoogle Scholar
  8. 8.
    Converse, ‘New Laws of Retail Gravitation’, pp. 380–2.Google Scholar
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    Huff, ‘Defining and Estimating a Trading Area’, p. 36; notice the similarity of Huff’s model to the earlier one developed by Casey, and quoted in Mossman and Morton, Logistics of Distribution Systems, p. 235.Google Scholar
  10. 10.
    Huff, ‘Defining and Estimating a Trading Area’, p. 38.Google Scholar
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    William Applebaum, ‘Methods for Determining Store Trade Areas, Market Penetration, and Potential Sales’, Journal of Marketing Research, vol. 3 (May 1966) pp. 127–41.CrossRefGoogle Scholar
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    William Applebaum and Richard F. Spears, ‘How to Measure a Trading Area’, Chain Store Age, vol. 27 (Jan. 1951) pp. 15–17, 33–4.Google Scholar
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    Gordon Wills, ‘Retail Location’, in Martin Christopher and Gordon Wills (eds), Marketing Logistics and Distribution Planning (London: Allen & Unwin, 1971) p. 296.Google Scholar
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  19. 19.
    S. Eilon and C. D. T. Watson-Gandy, ‘Models for Determining Depot Location’, International Journal of Physical Distribution, vol. 1, no. 1 (Oct. 1970) pp. 5–15.CrossRefGoogle Scholar
  20. 20.
    The example which follows is based on Mossman and Morton, Logistics of Distribution Systems, pp. 239–43.Google Scholar
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    Ballou, Business Logistics Management, p. 229.Google Scholar
  22. 22.
    Roger C. Vergin and Jack D. Rogers, ‘An Algorithm and Computational Procedure for Locating Economic Facilities’, Management Science, vol. 13, no. 6 (Feb. 1967) B-240–54.CrossRefGoogle Scholar
  23. 23.
    Eilon and Watson-Gandy, ‘Models for Determining Depot Location’, p. 7; also known as the numeric-analytic method.Google Scholar
  24. 24.
    Ballou, Business Logistics Management, p. 241.Google Scholar
  25. 25.
    Harvey N. Shycon and Richard B. Maffei, ‘Simulation — Tool for Better Distribution’, Harvard Business Review, vol. 38, no. 6 (Nov./Dec. 1960) pp. 65–75.Google Scholar
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    William J. Baumol and Philip Wolfe, ‘A Warehouse-Location Problem’, Operations Research, vol. 6 (Mar.–Apr. 1958) pp. 252–63.CrossRefGoogle Scholar
  27. 27.
    For an excellent treatment of the transportation problem, see Russell L. Ackoff and Maurice W. Sasieni, Fundamentals of Operations Research (New York: John Wiley & Sons Inc., 1968) pp. 121–45.Google Scholar
  28. 28.
    Alfred A. Kuehn and Michael J. Hamburger, ‘A Heuristic Program for Locating Warehouses’, Management Science, vol. 9 (July 1963), pp. 643–66.CrossRefGoogle Scholar
  29. 29.
    Ronald H. Ballou, ‘Dynamic Warehouse Location Analysis’, Journal of Marketing Research, vol. 5, (Aug. 1968) pp. 271–6.CrossRefGoogle Scholar
  30. 30.
    For a discussion of dynamic programming, see Ackoff and Sasieni, Fundamentals of Operations Research, pp. 230–43.Google Scholar
  31. 31.
    Ballou, Business Logistics Management, p. 259.Google Scholar

Copyright information

© Graham Buxton 1975

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  • Graham Buxton

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