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Consumer choice in competitive location models: Formulations and heuristics

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  • Daniel Serra

    ()

  • Rosa Colomé

Abstract

A new direction of research in Competitive Location theory incorporates theories of Consumer Choice Behavior in its models. Following this direction, this paper studies the importance of consumer behavior with respect to distance or transportation costs in the optimality of locations obtained by traditional Competitive Location models. To do this, it considers different ways of defining a key parameter in the basic Maximum Capture model (MAXCAP). This parameter will reflect various ways of taking into account distance based on several Consumer Choice Behavior theories. The optimal locations and the deviation in demand captured when the optimal locations of the other models are used instead of the true ones, are computed for each model. A metaheuristic based on GRASP and Tabu search procedure is presented to solve all the models. Computational experience and an application to 55-node network are also presented.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/290.pdf
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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 290.

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Date of creation: May 1998
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Handle: RePEc:upf:upfgen:290

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Web page: http://www.econ.upf.edu/

Related research

Keywords: Distance; competitive location models; consumer choice behavior; GRASP; tabu;

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References

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  1. D Serra & H A Eiselt & G Laporte & C S ReVelle, 1999. "Market capture models under various customer-choice rules," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 26(5), pages 741-750, September.
  2. M J Hodgson, 1978. "Toward more realistic allocation in location - allocation models: an interaction approach," Environment and Planning A, Pion Ltd, London, vol. 10(11), pages 1273-1285, November.
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Cited by:
  1. José Fernández & Blas Pelegrín & Frank Plastria & Boglárka Tóth, 2007. "Planar Location and Design of a New Facility with Inner and Outer Competition: An Interval Lexicographical-like Solution Procedure," Networks and Spatial Economics, Springer, vol. 7(1), pages 19-44, March.
  2. Daniel Serra & Rosa Colomé, 2000. "Supermarket key attributes and location decisions: A comparative study between British and Spanish consumers," Economics Working Papers 469, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Verónica Durán-Carbó & Charles ReVelle & Daniel Serra, 2006. "Spatial market expansion through mergers," Economics Working Papers 960, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Giuseppe Bruno & Andrea Genovese & Antonino Sgalambro, 2010. "An Agent-Based framework for modeling and solving location problems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 18(1), pages 81-96, July.

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