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Competitive facility location under attrition

Author

Listed:
  • Zvi Drezner

    (California State University-Fullerton)

  • Dawit Zerom

    (California State University-Fullerton)

Abstract

In this paper we address the possibility that in a competitive facility location model, one of the existing competing facilities will go out of business. We find the best location for a new facility protecting against such a possibility. Four commonly used decision rules (optimistic, pessimistic, minimax regret, and expected value) are analyzed and optimally solved within a given relative accuracy. The results of extensive computational experiments are reported. Special upper bounds, that may be a basis for other optimization problems, are designed. They are much tighter than existing lower bounds. The number if iterations is reduced by a factor close to 5000, and consequently run times were improved by about the same factor. The largest instance of 10 existing competing facilities and 20,000 demand points was solved in less than one second by each of the four decision criteria. The idea of possible scenarios can be investigated by other models in future research.

Suggested Citation

  • Zvi Drezner & Dawit Zerom, 2023. "Competitive facility location under attrition," Computational Management Science, Springer, vol. 20(1), pages 1-19, December.
  • Handle: RePEc:spr:comgts:v:20:y:2023:i:1:d:10.1007_s10287-023-00473-z
    DOI: 10.1007/s10287-023-00473-z
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    References listed on IDEAS

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    1. David L. Huff, 1966. "A Programmed Solution for Approximating an Optimum Retail Location," Land Economics, University of Wisconsin Press, vol. 42(3), pages 293-303.
    2. Tammy Drezner & Morton O’Kelly & Zvi Drezner, 2023. "Multipurpose shopping trips and location," Annals of Operations Research, Springer, vol. 321(1), pages 191-208, February.
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    4. Tammy Drezner & Zvi Drezner, 2004. "Finding the optimal solution to the Huff based competitive location model," Computational Management Science, Springer, vol. 1(2), pages 193-208, July.
    5. Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2007. "Competitive facility location model with concave demand," European Journal of Operational Research, Elsevier, vol. 181(2), pages 598-619, September.
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    7. Tammy Drezner, 2009. "Location of retail facilities under conditions of uncertainty," Annals of Operations Research, Springer, vol. 167(1), pages 107-120, March.
    8. Tammy Drezner & Zvi Drezner & Dawit Zerom, 2020. "Facility Dependent Distance Decay in Competitive Location," Networks and Spatial Economics, Springer, vol. 20(4), pages 915-934, December.
    9. Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2007. "Competitive facility location and design problem," European Journal of Operational Research, Elsevier, vol. 182(1), pages 40-62, October.
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    11. Tammy Drezner & Zvi Drezner & Dawit Zerom, 2022. "An extension of the gravity model," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(12), pages 2732-2740, December.
    12. Pawel Kalczynski & Atsuo Suzuki & Zvi Drezner, 2022. "Multiple obnoxious facilities with weighted demand points," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 73(3), pages 598-607, March.
    13. Richard L. Church, 2019. "Understanding the Weber Location Paradigm," International Series in Operations Research & Management Science, in: H. A. Eiselt & Vladimir Marianov (ed.), Contributions to Location Analysis, chapter 0, pages 69-88, Springer.
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    Full references (including those not matched with items on IDEAS)

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