Analysing wholesale market development strategies for decongesting city centre considering retailers’ procurement choices

Abstract

This research is aimed at developing a method for relocating wholesale markets in a city with the objective of decongesting the central area by improving the traffic efficiency and to make it pollution free. This paper proposes a bi-level optimisation framework pursuing the local authority’s objective of maximising welfare benefits relative to the spend ensuring good value for money at the upper level. The lower-level framework considers retailers’ response to the relocation of wholesale markets allowing them the choice of procurement location. The lower-level problem also models the route choice of commercial vehicle traffic as well as the private vehicle traffic to measure the resulting on-street congestion. The bi-level problem has been solved with integer Particle Swarm Optimisation algorithm for the case of Bandung, Indonesia. The results show that relocating wholesale markets improves the city centre traffic efficiency and pollution level by about 14%. Traffic speeds over the entire city also improve by up to 6.6% and the pollution levels marginally would drop too. Market relocation as a strategy would significantly improve the efficiency and pollution levels but must be carefully planned and evaluated otherwise the emissions outside of city centre could increase.