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An Empirical Test of the Gravity p-Median Model

Author

Listed:
  • Carling, Kenneth

    (Dalarna university)

  • Han, Mengjie

    (Dalarna university)

  • Håkansson, Johan

    (Dalarna university)

  • Rebreyend, Pascal

    (The Swedish Research Institute of Trade (HUI))

Abstract

A customer is presumed to gravitate to a facility by the distance to it and the attractiveness of it. However regarding the location of the facility, the presumption is that the customer opts for the shortest route to the nearest facility. This paradox was recently solved by the introduction of the gravity p-median model. The model is yet to be implemented and tested empirically. We implemented the model in an empirical problem of locating locksmiths, vehicle inspections, and retail stores of vehicle spare-parts, and we compared the solutions with those of the p-median model. We found the gravity p-median model to be of limited use for the problem of locating facilities as it either gives solutions similar to the p-median model, or it gives unstable solutions due to a non-concave objective function.

Suggested Citation

  • Carling, Kenneth & Han, Mengjie & Håkansson, Johan & Rebreyend, Pascal, 2013. "An Empirical Test of the Gravity p-Median Model," HUI Working Papers 90, HUI Research.
    • Handle: RePEc:hhs:huiwps:0090
    as

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    References listed on IDEAS

    as
    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. Trevor Hale & Christopher Moberg, 2003. "Location Science Research: A Review," Annals of Operations Research, Springer, vol. 123(1), pages 21-35, October.
    3. Carling, Kenneth & Håkansson, Johan, 2012. "A compelling argument for the gravity p-median model," HUI Working Papers 77, HUI Research.
    4. Drezner, Tammy & Drezner, Zvi, 2007. "The gravity p-median model," European Journal of Operational Research, Elsevier, vol. 179(3), pages 1239-1251, June.
    5. Kenneth Carling & Mengjie Han & Johan Håkansson, 2012. "Does Euclidean distance work well when the p-median model is applied in rural areas?," Annals of Operations Research, Springer, vol. 201(1), pages 83-97, December.
    6. S. L. Hakimi, 1964. "Optimum Locations of Switching Centers and the Absolute Centers and Medians of a Graph," Operations Research, INFORMS, vol. 12(3), pages 450-459, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    distance decay; market share; network; retail; simulated annealing; travel time;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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