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Stability of utility functions and apportionment rules in location models

Author

Listed:
  • H. A. Eiselt

    (University of New Brunswick)

  • Vladimir Marianov

    (Instituto Sistemas Complejos de Ingeniería (ISCI), Pontificia Universidad Católica de Chile)

Abstract

This paper investigates how demand is apportioned to facilities by customers, given that they apply one of a number of utility functions according to which they satisfy their demand at the facilities. After delineating the basic decision-making process, a number of reasonable assumptions are formulated regarding the behavior of the utility functions after a scaling of their different parameters. The individual apportionment rules are examined so as to whether or not they satisfy these assumptions. The results are of importance for decision-makers that must use these utility functions when facing locational decisions.

Suggested Citation

  • H. A. Eiselt & Vladimir Marianov, 2020. "Stability of utility functions and apportionment rules in location models," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 28(3), pages 772-792, October.
    • Handle: RePEc:spr:topjnl:v:28:y:2020:i:3:d:10.1007_s11750-020-00569-8
    DOI: 10.1007/s11750-020-00569-8
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    References listed on IDEAS

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