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A cover-based competitive location model

Author

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  • T Drezner

    (Steven G. Mihaylo College of Business and Economics, California State University–Fullerton)

  • Z Drezner

    (Steven G. Mihaylo College of Business and Economics, California State University–Fullerton)

  • P Kalczynski

    (Steven G. Mihaylo College of Business and Economics, California State University–Fullerton)

Abstract

In this paper we propose a new approach to estimating market share captured by competing facilities. The approach is based on cover location models. Each competing facility has a ‘sphere of influence’ determined by its attractiveness level. More attractive facilities have a larger radius of the sphere of influence. The buying power of a customer within the sphere of influence of several facilities is equally divided among the competing facilities. The buying power of a customer within the sphere of influence of no facility is lost. Assuming the presence of competition in the area, the objective is to add a number of new facilities to a chain of existing facilities in such a way that the increase of market share captured by the chain is maximized. The model is formulated and analysed. Optimal and heuristic solution algorithms are designed. Computational experiments demonstrate the effectiveness of the proposed algorithms.

Suggested Citation

  • T Drezner & Z Drezner & P Kalczynski, 2011. "A cover-based competitive location model," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(1), pages 100-113, January.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:1:d:10.1057_jors.2009.153
    DOI: 10.1057/jors.2009.153
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    References listed on IDEAS

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    Cited by:

    1. Tammy Drezner & Zvi Drezner & Dawit Zerom, 2023. "The Obnoxious Competitive Facility Location Model," Networks and Spatial Economics, Springer, vol. 23(4), pages 885-903, December.
    2. Christian Burkart & Pamela C. Nolz & Walter J. Gutjahr, 2017. "Modelling beneficiaries’ choice in disaster relief logistics," Annals of Operations Research, Springer, vol. 256(1), pages 41-61, September.
    3. Tammy Drezner & Zvi Drezner & Pawel Kalczynski, 2020. "Gradual cover competitive facility location," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(2), pages 333-354, June.
    4. Tammy Drezner & Zvi Drezner & Dawit Zerom, 2020. "Facility Dependent Distance Decay in Competitive Location," Networks and Spatial Economics, Springer, vol. 20(4), pages 915-934, December.
    5. Mejía, Gonzalo & Aránguiz, Raúl & Espejo-Díaz, Julián Alberto & Granados-Rivera, Daniela & Mejía-Argueta, Christopher, 2023. "Can street markets be a sustainable strategy to mitigate food insecurity in emerging countries? Insights from a competitive facility location model," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    6. Tammy Drezner & Zvi Drezner & Pawel Kalczynski, 2019. "A directional approach to gradual cover," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 27(1), pages 70-93, April.

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