IDEAS home Printed from https://ideas.repec.org/a/kap/netspa/v7y2007i1p19-44.html
   My bibliography  Save this article

Planar Location and Design of a New Facility with Inner and Outer Competition: An Interval Lexicographical-like Solution Procedure

Author

Listed:
  • José Fernández

    ()

  • Blas Pelegrín
  • Frank Plastria
  • Boglárka Tóth

Abstract

A chain has to decide the location and design for a single new facility in a region where a set of facilities already exists offering the same type of product. Some of the existing facilities belong to the chain and the others are competitors. Since competition comes from outside the chain, the maximization of the profit is the main objective of the chain’s owner. Customers are supposed to patronize all the facilities, the old and the new, proportionally to the attraction they feel for them. The entrance of the new facility may thus also have a detrimental effect on the market shares of the existing chain-owned facilities, and this cannibalization should be minimized as a secondary objective. This problem is formulated as a biobjective optimization problem, and a variant of the lexicographic method is proposed to generate certain efficient solutions. This requires solving two related optimization problems, both neither convex nor concave, for which a unified interval branch and bound method is developed. Computational experiments on randomly generated problems show the feasibility of the approach, while an application of the model with real data demonstrates its use for economical analysis. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • 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.
  • Handle: RePEc:kap:netspa:v:7:y:2007:i:1:p:19-44
    DOI: 10.1007/s11067-006-9005-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11067-006-9005-4
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wendell, R. E. & McKelvey, R. D., 1981. "New perspectives in competitive location theory," European Journal of Operational Research, Elsevier, vol. 6(2), pages 174-182, February.
    2. Plastria, Frank, 2001. "Static competitive facility location: An overview of optimisation approaches," European Journal of Operational Research, Elsevier, vol. 129(3), pages 461-470, March.
    3. Daniel Serra & Rosa Colomé, 1998. "Consumer choice in competitive location models: Formulations and heuristics," Economics Working Papers 290, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Plastria, Frank, 1992. "GBSSS: The generalized big square small square method for planar single-facility location," European Journal of Operational Research, Elsevier, vol. 62(2), pages 163-174, October.
    5. repec:cor:louvrp:-1435 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:annopr:v:246:y:2016:i:1:d:10.1007_s10479-014-1676-5 is not listed on IDEAS
    2. Dominik Kress & Erwin Pesch, 2016. "Competitive Location and Pricing on Networks with Random Utilities," Networks and Spatial Economics, Springer, vol. 16(3), pages 837-863, September.
    3. Schöbel, Anita & Scholz, Daniel, 2014. "A solution algorithm for non-convex mixed integer optimization problems with only few continuous variables," European Journal of Operational Research, Elsevier, vol. 232(2), pages 266-275.
    4. Küçükaydin, Hande & Aras, Necati & Kuban AltInel, I., 2011. "Competitive facility location problem with attractiveness adjustment of the follower: A bilevel programming model and its solution," European Journal of Operational Research, Elsevier, vol. 208(3), pages 206-220, February.
    5. Blanquero, Rafael & Carrizosa, Emilio & Schöbel, Anita & Scholz, Daniel, 2011. "A global optimization procedure for the location of a median line in the three-dimensional space," European Journal of Operational Research, Elsevier, vol. 215(1), pages 14-20, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:7:y:2007:i:1:p:19-44. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.