Title
Competitive facility location model with concave demand
Abstract
We consider a spatial interaction model for locating a set of new facilities that compete for customer demand with each other, as well as with some pre-existing facilities to capture the “market expansion” and the “market cannibalization” effects. Customer demand is assumed to be a concave non-decreasing function of the total utility derived by each customer from the service offered by the facilities. The problem is formulated as a non-linear Knapsack problem, for which we develop a novel solution approach based on constructing an efficient piecewise linear approximation scheme for the objective function. This allows us to develop exact and α-optimal solution approaches capable of dealing with relatively large-scale instances of the model. We also develop a fast Heuristic Algorithm for which a tight worst-case error bound is established.
Year
DOI
Venue
2007
10.1016/j.ejor.2005.10.075
European Journal of Operational Research
Keywords
Field
DocType
Location,Integer programming,Competitive facility location models,Non-linear Knapsack problem,Alpha-optimal solutions,Greedy heuristics,Worst-case bounds
Linear approximation,Mathematical optimization,Cannibalization,Heuristic (computer science),Concave function,Greedy algorithm,Facility location problem,Integer programming,Knapsack problem,Mathematics
Journal
Volume
Issue
ISSN
181
2
0377-2217
Citations 
PageRank 
References 
27
2.02
8
Authors
3
Name
Order
Citations
PageRank
Robert Aboolian11229.15
O. Berman21604231.36
Dmitry Krass348382.08