Distribution centre location modelling for differential sales tax structure [An article from: European Journal of Operational Research]

This digital document is a journal article from European Journal of Operational Research, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
The central sales tax (CST) in India results in a differential sales tax structure. This contributes significantly to distribution network decisions that build logistics inefficiencies in firms operating in India. In this paper, we develop a model for determining distribution centres (DCs) locations considering the impact of CST. A non-linear mixed integer-programming problem that is formulated initially is approximated to a mixed integer-programming problem. Using a numeric example, the effect of CST rates and product variety on DC locations is studied and found to be having impact. It is felt that the Indian Government proposal to switch over from the present sales tax regime to value added tax (VAT) regime would significantly contribute to reducing the logistics inefficiencies of Indian firms.