Demarcating distribution area of goods is often guided by the rule of thumb by business proprietors. However, this method seems to be unsuitable when the demand points increase to a certain large extent. The present work attempted to convert the problem of distribution area demarcation into a localized problem of warehouseing and networking, and tried to establish district-based planning mode based on location based heuristic (LBH). Two methods were used in this study: 1) the manual method to construct the mathematical model and conduct simulation; 2) the automatic method using TransCAD software of geographical information system (GIS) for simulation. By comparing the effects of the two methods, the research provides theoretical support for business proprietors to demarcate the distribution area rationally with the application of GIS system. The results show that GIS has very good graphics construction function to replace complex text, and the automatic demarcating mode with human-machine interaction provides a good business decision-making support.
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