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Location models for ceding market share and shrinking services

  • ReVelle, Charles
  • Murray, Alan T.
  • Serra, Daniel

New location models are presented here for exploring the reduction of facilities in a region. The first of these models considers firms ceding market share to competitors under situations of financial exigency. The goal of this model is to cede the least market share, i.e., retain as much of the customer base as possible while shedding costly outlets. The second model considers a firm essentially without competition that must shrink it services for economic reasons. This firm is assumed to close outlets so that the degradation of service is limited. An example is offered within a competitive environment to demonstrate the usefulness of this modeling approach.

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Article provided by Elsevier in its journal Omega.

Volume (Year): 35 (2007)
Issue (Month): 5 (October)
Pages: 533-540

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Handle: RePEc:eee:jomega:v:35:y:2007:i:5:p:533-540
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  1. ReVelle, Charles, 1993. "Facility siting and integer-friendly programming," European Journal of Operational Research, Elsevier, vol. 65(2), pages 147-158, March.
  2. Vladimir Marianov & Daniel Serra, 2004. "Location models in the public sector," Economics Working Papers 755, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Klincewicz, John G. & Luss, Hanan & Yu, Chang-Sung, 1988. "A large-scale multilocation capacity planning model," European Journal of Operational Research, Elsevier, vol. 34(2), pages 178-190, March.
  4. Melachrinoudis, Emanuel & Min, Hokey, 2000. "The dynamic relocation and phase-out of a hybrid, two-echelon plant/warehousing facility: A multiple objective approach," European Journal of Operational Research, Elsevier, vol. 123(1), pages 1-15, May.
  5. Weston, Frederick C., 1982. "Optimal configuration of telephone answering sites in a service industry," European Journal of Operational Research, Elsevier, vol. 10(4), pages 395-405, August.
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