Distribution centre location modelling for differential sales tax structure

Document Type

Article

Publication Title

European Journal of Operational Research

Abstract

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. (C) 2003 Published by Elsevier B.V.

Publication Date

1-4-2005

Publisher

Elsevier Science Bv

Volume

Vol.162

Issue

Iss.1

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