IDEAS home Printed from https://ideas.repec.org/a/spr/comgts/v21y2024i1d10.1007_s10287-023-00484-w.html
   My bibliography  Save this article

A refinement of the gravity model for competitive facility location

Author

Listed:
  • Zvi Drezner

    (California State University-Fullerton)

  • Dawit Zerom

    (California State University-Fullerton)

Abstract

Most competitive location models assume that as the distance increases, the patronage of a facility declines at the same rate regardless of the facility attractiveness. We observed that the rate at which patronage declines is slower for more attractive facilities. Customers are willing to drive long distances to patronize an attractive facility. Less attractive facilities hardly attract customers from long distances. We propose to modify the effect of attractiveness on the appeal of the facility to customers. Many methods for estimating the market share captured by a facility can be modified to incorporate such property. We implemented the new modification on the gravity model and tested it on a real data set of shopping malls in Orange County, California. The approach was statistically validated and is computationally straightforward to implement with existing software such as R. Further, new facility location decisions are expected to be more accurate due to the improved market share estimates by the proposed model.

Suggested Citation

  • Zvi Drezner & Dawit Zerom, 2024. "A refinement of the gravity model for competitive facility location," Computational Management Science, Springer, vol. 21(1), pages 1-18, June.
    • Handle: RePEc:spr:comgts:v:21:y:2024:i:1:d:10.1007_s10287-023-00484-w
    DOI: 10.1007/s10287-023-00484-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10287-023-00484-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10287-023-00484-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tammy Drezner & Zvi Drezner & Pawel Kalczynski, 2020. "Gradual cover competitive facility location," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(2), pages 333-354, June.
    2. 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.
    3. Hakimi, S. Louis, 1983. "On locating new facilities in a competitive environment," European Journal of Operational Research, Elsevier, vol. 12(1), pages 29-35, January.
    4. Drezner, Tammy & Drezner, Zvi & Salhi, Said, 2002. "Solving the multiple competitive facilities location problem," European Journal of Operational Research, Elsevier, vol. 142(1), pages 138-151, October.
    5. T Drezner & Z Drezner & P Kalczynski, 2012. "Strategic competitive location: improving existing and establishing new facilities," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(12), pages 1720-1730, December.
    6. T Drezner & Z Drezner & P Kalczynski, 2011. "A cover-based competitive location model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(1), pages 100-113, January.
    7. 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.
    8. Robert Aboolian & Oded Berman & Dmitry Krass, 2009. "Efficient solution approaches for a discrete multi-facility competitive interaction model," Annals of Operations Research, Springer, vol. 167(1), pages 297-306, March.
    9. Frank A. Fetter, 1924. "The Economic Law of Market Areas," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 38(3), pages 520-529.
    10. Hansen, Pierre & Mladenovic, Nenad, 2001. "Variable neighborhood search: Principles and applications," European Journal of Operational Research, Elsevier, vol. 130(3), pages 449-467, May.
    11. Tammy Drezner & Zvi Drezner, 2002. "Validating the Gravity-Based Competitive Location Model Using Inferred Attractiveness," Annals of Operations Research, Springer, vol. 111(1), pages 227-237, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Malgorzata Miklas-Kalczynska, 2024. "Extensions to Competitive Facility Location with Multi-purpose Trips," Networks and Spatial Economics, Springer, vol. 24(3), pages 565-588, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Drezner, Zvi & Eiselt, H.A., 2024. "Competitive location models: A review," European Journal of Operational Research, Elsevier, vol. 316(1), pages 5-18.
    2. Tammy Drezner & Zvi Drezner & Atsuo Suzuki, 2019. "A cover based competitive facility location model with continuous demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 66(7), pages 565-581, October.
    3. Tammy Drezner & Zvi Drezner & Pawel Kalczynski, 2020. "Gradual cover competitive facility location," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(2), pages 333-354, June.
    4. 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.
    5. Küçükaydin, Hande & Aras, Necati & Kuban AltInel, I., 2011. "Competitive facility location problem with attractiveness adjustment of the follower: A bilevel programming model and its solution," European Journal of Operational Research, Elsevier, vol. 208(3), pages 206-220, February.
    6. H Küçükaydın & N Aras & İ K Altınel, 2011. "A discrete competitive facility location model with variable attractiveness," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(9), pages 1726-1741, September.
    7. 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.
    8. Tammy Drezner & Zvi Drezner & Dawit Zerom, 2023. "The Obnoxious Competitive Facility Location Model," Networks and Spatial Economics, Springer, vol. 23(4), pages 885-903, December.
    9. Vladimir Marianov & H. A. Eiselt, 2016. "On agglomeration in competitive location models," Annals of Operations Research, Springer, vol. 246(1), pages 31-55, November.
    10. Farahani, Reza Zanjirani & Rezapour, Shabnam & Drezner, Tammy & Fallah, Samira, 2014. "Competitive supply chain network design: An overview of classifications, models, solution techniques and applications," Omega, Elsevier, vol. 45(C), pages 92-118.
    11. Tammy Drezner & Zvi Drezner & Pawel Kalczynski, 2019. "A directional approach to gradual cover," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 27(1), pages 70-93, April.
    12. Robert Aboolian & Oded Berman & Dmitry Krass, 2009. "Efficient solution approaches for a discrete multi-facility competitive interaction model," Annals of Operations Research, Springer, vol. 167(1), pages 297-306, March.
    13. Zvi Drezner & Dawit Zerom, 2023. "Competitive facility location under attrition," Computational Management Science, Springer, vol. 20(1), pages 1-19, December.
    14. Tammy Drezner, 2009. "Location of retail facilities under conditions of uncertainty," Annals of Operations Research, Springer, vol. 167(1), pages 107-120, March.
    15. T Drezner & Z Drezner & P Kalczynski, 2011. "A cover-based competitive location model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(1), pages 100-113, January.
    16. Xiang Li & Tianyu Zhang & Liang Wang & Hongguang Ma & Xiande Zhao, 2022. "A minimax regret model for the leader–follower facility location problem," Annals of Operations Research, Springer, vol. 309(2), pages 861-882, February.
    17. Fernández, José & Hendrix, Eligius M.T., 2013. "Recent insights in Huff-like competitive facility location and design," European Journal of Operational Research, Elsevier, vol. 227(3), pages 581-584.
    18. T Drezner & Z Drezner, 2008. "Lost demand in a competitive environment," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(3), pages 362-371, March.
    19. S Rezapour & R Zanjirani Farahani & T Drezner, 2011. "Strategic design of competing supply chain networks for inelastic demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(10), pages 1784-1795, October.
    20. J. Redondo & J. Fernández & I. García & P. Ortigosa, 2009. "A robust and efficient algorithm for planar competitive location problems," Annals of Operations Research, Springer, vol. 167(1), pages 87-105, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:comgts:v:21:y:2024:i:1:d:10.1007_s10287-023-00484-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.