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The leader multipurpose shopping location problem

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  • Lüer-Villagra, Armin
  • Marianov, Vladimir
  • Eiselt, H.A.
  • Méndez-Vogel, Gonzalo

Abstract

This paper extends the follower's retail store location problem of Marianov et al. (2018) to include the leader's decisions. The leader locates its stores knowing that a follower will enter the market later offering a different product. Both maximize their markets given that customers can purchase none, one or two non-essential products on the same trip. The paper determines the best locations for a first and a second entrants through exact and approximated procedures. It turns out that, by locating with foresight, a first entrant can increase the total business in an area for himself and subsequent entrants. We solve the binary programming bi-level resulting problem for small instances by adapting an ad-hoc procedure. Furthermore, a new bi-level reactive GRASP procedure finds solutions for instances of up to 100 nodes in under 3,600 s of CPU time.

Suggested Citation

  • Lüer-Villagra, Armin & Marianov, Vladimir & Eiselt, H.A. & Méndez-Vogel, Gonzalo, 2022. "The leader multipurpose shopping location problem," European Journal of Operational Research, Elsevier, vol. 302(2), pages 470-481.
    • Handle: RePEc:eee:ejores:v:302:y:2022:i:2:p:470-481
    DOI: 10.1016/j.ejor.2022.01.016
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    1. Méndez-Vogel, Gonzalo & Marianov, Vladimir & Lüer-Villagra, Armin & Eiselt, H.A., 2023. "Store location with multipurpose shopping trips and a new random utility customers’ choice model," European Journal of Operational Research, Elsevier, vol. 305(2), pages 708-721.
    2. Méndez-Vogel, Gonzalo & Marianov, Vladimir & Lüer-Villagra, Armin, 2023. "The follower competitive facility location problem under the nested logit choice rule," European Journal of Operational Research, Elsevier, vol. 310(2), pages 834-846.

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