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Testing the gravity p-median model empirically

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  • Carling, Kenneth
  • Han, Mengjie
  • Håkansson, Johan
  • Rebreyend, Pascal

Abstract

Regarding the location of a facility, the presumption in the widely used p-median model is that the customer opts for the shortest route to the nearest facility. However, this assumption is problematic on free markets since the customer is presumed to gravitate to a facility by the distance to and the attractiveness of it. The recently introduced gravity p-median model offers an extension to the p-median model that account for this. The model is therefore potentially interesting, although it has not yet been implemented and tested empirically. In this paper, we have implemented the model in an empirical problem of locating vehicle inspections, locksmiths, and retail stores of vehicle spare-parts for the purpose of investigating its superiority to the p-median model. We found, however, 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, 2015. "Testing the gravity p-median model empirically," Operations Research Perspectives, Elsevier, vol. 2(C), pages 124-132.
    • Handle: RePEc:eee:oprepe:v:2:y:2015:i:c:p:124-132
    DOI: 10.1016/j.orp.2015.06.002
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    References listed on IDEAS

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    1. Kenneth Carling & Xiangli Meng, 2015. "Confidence in heuristic solutions?," Journal of Global Optimization, Springer, vol. 63(2), pages 381-399, October.
    2. 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.
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    4. Drezner, Tammy & Drezner, Zvi, 2007. "The gravity p-median model," European Journal of Operational Research, Elsevier, vol. 179(3), pages 1239-1251, June.
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    6. T Drezner & Z Drezner & P Kalczynski, 2012. "Strategic competitive location: improving existing and establishing new facilities," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(12), pages 1720-1730, December.
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    8. T Drezner & Z Drezner, 2012. "Modelling lost demand in competitive facility location," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(2), pages 201-206, February.
    9. 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.
    10. 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.
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    Cited by:

    1. Tao Zhuolin & Zheng Qingjing & Kong Hui, 2018. "A Modified Gravity p-Median Model for Optimizing Facility Locations," Journal of Systems Science and Information, De Gruyter, vol. 6(5), pages 421-434, October.

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