Surviving in a competitive spatial market: The threshold capture model
Most facility location decision models ignore the fact that for a facility to survive it needs a minimum demand level to cover costs. In this paper we present a decision model for a firm that wishes to enter a spatial market where there are several competitors already located. This market is such that for each outlet there is a demand threshold level that has to be achieved in order to survive. The firm wishes to know where to locate its outlets so as to maximize its market share taking into account the threshold level. It may happen that due to this new entrance, some competitors will not be able to meet the threshold and therefore will disappear. A formulation is presented together with a heuristic solution method and computational experience.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- J R Current & J E Storbeck, 1988. "Capacitated covering models," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 15(2), pages 153-163, March.
- Hasan Pirkul & David A. Schilling, 1991. "The Maximal Covering Location Problem with Capacities on Total Workload," Management Science, INFORMS, vol. 37(2), pages 233-248, February.
- Bresnahan, Timothy F & Reiss, Peter C, 1991.
"Entry and Competition in Concentrated Markets,"
Journal of Political Economy,
University of Chicago Press, vol. 99(5), pages 977-1009, October.
- Cornuejols, G. & Sridharan, R. & Thizy, J. M., 1991. "A comparison of heuristics and relaxations for the capacitated plant location problem," European Journal of Operational Research, Elsevier, vol. 50(3), pages 280-297, February.
- ReVelle, Charles, 1993. "Facility siting and integer-friendly programming," European Journal of Operational Research, Elsevier, vol. 65(2), pages 147-158, March.
- J R Current & J E Storbeck, 1988. "Capacitated Covering Models," Environment and Planning B, , vol. 15(2), pages 153-163, June.
- Rosing, K. E. & ReVelle, C. S., 1997. "Heuristic concentration: Two stage solution construction," European Journal of Operational Research, Elsevier, vol. 97(1), pages 75-86, February.
When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:359. 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: ()
If references are entirely missing, you can add them using this form.