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Location models for ceding market share and shrinking services

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Abstract

New location models are presented here for exploring the reduction of facilities in a region. The first of these models considers firms ceding market share to competitors under situations of financial exigency. The goal of this model is to cede the least market share, i.e., retain as much of the customer base as possible while shedding costly outlets. The second model considers a firm essentially without competition that must shrink it services for economic reasons. This firm is assumed to close outlets so that the degradation of service is limited. An example is offered within a competitive environment to demonstrate the usefulness of this modeling approach.

Suggested Citation

  • Charles ReVelle & Alan T. Murray & Daniel Serra, 2004. "Location models for ceding market share and shrinking services," Economics Working Papers 753, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:753
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    1. Klincewicz, John G. & Luss, Hanan & Yu, Chang-Sung, 1988. "A large-scale multilocation capacity planning model," European Journal of Operational Research, Elsevier, vol. 34(2), pages 178-190, March.
    2. Melachrinoudis, Emanuel & Min, Hokey, 2000. "The dynamic relocation and phase-out of a hybrid, two-echelon plant/warehousing facility: A multiple objective approach," European Journal of Operational Research, Elsevier, vol. 123(1), pages 1-15, May.
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    4. ReVelle, Charles, 1993. "Facility siting and integer-friendly programming," European Journal of Operational Research, Elsevier, vol. 65(2), pages 147-158, March.
    5. Vladimir Marianov & Daniel Serra, 2004. "Location models in the public sector," Economics Working Papers 755, Department of Economics and Business, Universitat Pompeu Fabra.
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    Cited by:

    1. Bruno, Giuseppe & Esposito, Emilio & Genovese, Andrea & Piccolo, Carmela, 2016. "Institutions and facility mergers in the Italian education system: Models and case studies," Socio-Economic Planning Sciences, Elsevier, vol. 53(C), pages 23-32.
    2. repec:spr:annopr:v:256:y:2017:i:1:d:10.1007_s10479-016-2288-z is not listed on IDEAS
    3. Bell, John E. & Griffis, Stanley E. & Cunningham III, William A. & Eberlan, Jon A., 2011. "Location optimization of strategic alert sites for homeland defense," Omega, Elsevier, vol. 39(2), pages 151-158, April.
    4. Pelegrín, Blas & Fernández, Pascual & Dolores García Pérez, María & Cano Hernández, Saúl, 2012. "On the location of new facilities for chain expansion under delivered pricing," Omega, Elsevier, vol. 40(2), pages 149-158, April.
    5. repec:eee:proeco:v:199:y:2018:i:c:p:162-178 is not listed on IDEAS
    6. repec:spr:annopr:v:246:y:2016:i:1:d:10.1007_s10479-014-1730-3 is not listed on IDEAS
    7. Haase, Knut & Müller, Sven, 2013. "Management of school locations allowing for free school choice," Omega, Elsevier, vol. 41(5), pages 847-855.
    8. Bieniek, Milena, 2015. "A note on the facility location problem with stochastic demands," Omega, Elsevier, vol. 55(C), pages 53-60.
    9. Guerriero, Francesca & Miglionico, Giovanna & Olivito, Filomena, 2016. "Location and reorganization problems: The Calabrian health care system case," European Journal of Operational Research, Elsevier, vol. 250(3), pages 939-954.
    10. Rezapour, Shabnam & Hassani, Ashkan & Farahani, Reza Zanjirani, 2015. "Concurrent design of product family and supply chain network considering quality and price," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 81(C), pages 18-35.
    11. Eric Delmelle & Jean-Claude Thill & Dominique Peeters & Isabelle Thomas, 2014. "A multi-period capacitated school location problem with modular equipment and closest assignment considerations," Journal of Geographical Systems, Springer, vol. 16(3), pages 263-286, July.
    12. Rezapour, Shabnam & Farahani, Reza Zanjirani & Dullaert, Wout & De Borger, Bruno, 2014. "Designing a new supply chain for competition against an existing supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 124-140.
    13. Haase, Knut & Hoppe, Mirko, 2008. "Standortplanung unter Wettbewerb - Teil 1: Grundlagen," Discussion Papers 2/2008, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    14. Farahani, Reza Zanjirani & Rezapour, Shabnam & Drezner, Tammy & Fallah, Samira, 2014. "Competitive supply chain network design: An overview of classifications, models, solution techniques and applications," Omega, Elsevier, vol. 45(C), pages 92-118.
    15. Overholts II, Dale L. & Bell, John E. & Arostegui, Marvin A., 2009. "A location analysis approach for military maintenance scheduling with geographically dispersed service areas," Omega, Elsevier, vol. 37(4), pages 838-852, August.

    More about this item

    Keywords

    De-location; shrinkage; covering models;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • J80 - Labor and Demographic Economics - - Labor Standards - - - General

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