Paper Info
Title
Competitive facility location and design with reactions of competitors already in the market.
Abstract
A new retail facility is to locate and its service quality is to determine where similar facilities of competitors offering the same goods are already present. The market share captured by each facility depends on its distance to customers and its quality, which is described by a probabilistic Huff-like model. In order to maximize the profit of the new facility, a two-stage method is developed, which takes into account the reactions of the competitors. In the quality decision stage, the competitive decision process occurring among facilities is modelled as a game, whose solution is given by its Nash equilibrium. The solution, which can be represented as functions of the location of the new facility, is obtained by analytical resolution of a system of equations in the case of one facility in the market or by polynomial approximation in the case of multiple facilities. In the location decision stage, an interval based global optimization method is used to determine the best location of the new facility. Numerical experiments on randomly generated instances demonstrate the effectiveness of the method. (C) 2011 Elsevier B.V. All rights reserved.
Year
DOI
Venue
2012
10.1016/j.ejor.2011.12.017
European Journal of Operational Research
Keywords
Field
DocType
Competitive facility location and design,Nash equilibrium,Function approximation,Global optimization,Branch-and-bound
Mathematical optimization,Global optimization,Service quality,Facility location problem,Probabilistic logic,Nash equilibrium,1-center problem,Market share,Mathematics,Operations management,Competitor analysis
Journal
Volume
Issue
ISSN
219
1
0377-2217
Citations 
PageRank 
References 
12
0.66
5
Authors
3
Name
Order
Citations
PageRank
Nasreddine Saidani1121.34
Feng Chu2103078.80
Haoxun Chen377360.23