A STUDY ON INFLUENCE OF CENTER FEE ON DISTRIBUTION SYSTEMS AND ITS FAIRNESS

Abstract

This paper considers problems associated with the center fee in distribution systems. Vendors for daily necessities used to deliver goods directly to the stores of large-scale retail chains. Now, many large-scale retail chains have their own distribution centers and force the vendors to deliver the goods to the centers instead. The wholesale price customarily includes the vendor's delivery cost, but is the same regardless of the delivery destination. Therefore, they levy the center fee for the utilization of center and the subsequent delivery to the stores on the vendors. The system charging the center fee has caused a variety of problems to the vendors. In this study, we analyze the influence of center fee on distribution systems through a mathematical model. Then, we discuss the fairness of center fee and show the procedure for realizing the fairness.