The reasonable location selection scheme of the dairy distribution center plays an important role in dairy supply chain. It can ensure the operation efficient operation of the supply chain, and can reduce the operating cost. This paper analyzed the objectives and constraints of dairy product location selection. A mathematical analysis model for this problem was constructed. Based on the characteristics of the model, IACO (improved ant colony optimization) algorithm was proposed. This algorithm improved the rules for updating pheromone concentration and transition probability. The effectiveness of the algorithm was verified by simulation experiments.