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Multi-facility location models incorporating multipurpose shopping trips

Author

Listed:
  • Pawel Kalczynski

    (California State University-Fullerton)

  • Zvi Drezner

    (California State University-Fullerton)

  • Morton O’Kelly

    (Ohio State University)

Abstract

This paper continues to develop and explore the impact of multipurpose trips on retail location. We develop a model for locating multiple facilities of a chain in an area where several other facilities, either competing or selling different products, are present. There may be some existing facilities of the same chain as well. A shopping trip may include purchasing the product of the new firm and a different product (multipurpose shopping). The addition of multiple new outlets can cause cannibalization of existing sales, but this effect is mitigated by selecting good locations, and the total market share captured by the chain increases. The introduction of multipurpose trips enhances the total market share of the location selected by the decision maker. Since in reality many customers combine a visit to more than one facility in one shopping trip, the model predicts the expected market share captured more accurately. Therefore, the selected locations for new facilities are more accurate as well.

Suggested Citation

  • Pawel Kalczynski & Zvi Drezner & Morton O’Kelly, 2025. "Multi-facility location models incorporating multipurpose shopping trips," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 47(2), pages 455-475, June.
    • Handle: RePEc:spr:orspec:v:47:y:2025:i:2:d:10.1007_s00291-024-00792-w
    DOI: 10.1007/s00291-024-00792-w
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