Locating multiple competitive facilities: Spatial interaction models with variable expenditures

We develop a new framework for location of competitive facilities by introducing non-constant expenditure functions into spatial interaction location models. This framework allows us to capture two key effects - market expansion and cannibalization - within the same model. We develop algorithmic app...

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Bibliographic Details
Published in:Annals of operations research 2002-03, Vol.111 (1), p.197
Main Authors: Berman, Oded, Krass, Dmitry
Format: Article
Language:English
Subjects:
Competition
Customer services
Expenditures
Integer programming
Marketing
Mathematical models
Mathematical programming
Monopolies
Operations research
Optimization
Studies
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Summary:We develop a new framework for location of competitive facilities by introducing non-constant expenditure functions into spatial interaction location models. This framework allows us to capture two key effects - market expansion and cannibalization - within the same model. We develop algorithmic approaches for finding optimal or near-optimal solutions for several models that arise from choosing a specific form of the expenditure functions. [PUBLICATION ABSTRACT]
ISSN:0254-5330
1572-9338
DOI:10.1023/A:1020957904442