The maximum capture per unit cost location problem
This paper considers the problem of siting p new facilities of an entering firm to a competitive market so as to maximize the market share captured from competitors per unit cost. We first formulate the problem as a mixed 0-1 fractional programming model, in which we incorporate the fixed cost and transportation cost. The model can deal with the case where some demand nodes have two or more possible closest servers. We then re-formulate the problem as a 0-1 mixed integer linear program. We use a one-opt heuristic algorithm based on the Teitz-Bart method to obtain feasible solutions and compare them with the optimal solutions obtained by a branch-and-bound algorithm. We conduct computational experiments to evaluate the two algorithms. The results show that both algorithms can solve the model efficiently and the model is integer-friendly. We discuss other computational results and provide managerial insights.
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- Carrizosa, Emilio & Conde, Eduardo, 2002. "A fractional model for locating semi-desirable facilities on networks," European Journal of Operational Research, Elsevier, vol. 136(1), pages 67-80, January.
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- ReVelle, Charles, 1993. "Facility siting and integer-friendly programming," European Journal of Operational Research, Elsevier, vol. 65(2), pages 147-158, March.
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"The maximum capture problem with uncertainty,"
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Pion Ltd, London, vol. 23(1), pages 49-59, January.
- Serra, Daniel & Marianov, Vladimir & ReVelle, Charles, 1992. "The maximum-capture hierarchical location problem," European Journal of Operational Research, Elsevier, vol. 62(3), pages 363-371, November.
- Li, Han-Lin, 1994. "A global approach for general 0-1 fractional programming," European Journal of Operational Research, Elsevier, vol. 73(3), pages 590-596, March.
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