Location of Distribution Centers and Market Areas According to Response Time
Depending on the required response time for freight distribution, a territory such as the United States can be serviced by a different number of distribution centers (DC). For a land transport response time of 7 days, only one DC would be required, located close to the demographic centroid of the United States, approximately in Northern Illinois. A response time of 5 days require two DCs, one on the East Coast and the other on the West Coast. Each would have a market area of about half the continental United States. As the required response time gets shorter (3 days and next day) the number of DCs increases exponentially and their market area decrease accordingly. A same day response time would require about 26 DCs (not shown).