Advertisement

Research on Facility Location Considering Location Cost and Competition Cost

  • Pi-ye Yuan
  • Nai-xu SongEmail author
  • Ya-wen Xie
Conference paper

Abstract

This paper studies the optimal location problem of new enterprises considering the competition cost and location cost under the condition that company A already exists and occupy a favorable market position. Assume the demand points are also the facility candidate points, three optional level construction scale for each facility, and facility attraction is proportional to the infrastructure construction scale. Gravity model will be used to distribute market share. The 0–1 nonlinear integer programming model is set up with the goal of maximizing profit, and the genetic algorithm is designed to solve the problem. The results show that considering the competition cost that may happen at the beginning of site selection is very necessary, which can achieve the purpose of reducing revenue and increasing income. A large number of numerical analyses show that the algorithm is fast and accurate.

Keywords

Competitive location Genetic algorithm Gravity model Nonlinear programming 

References

  1. 1.
    H. Hotelling, Stability in competition. Econ. J. 39(153), 41–57 (1929)CrossRefGoogle Scholar
  2. 2.
    L. Zhang, G. Rushton, Optimizing the size and locations of facilities in competitive multi-site service systems. Comput. Oper. Res. 35(2), 327–338 (2008)CrossRefGoogle Scholar
  3. 3.
    A. Dasci, G. Laporte, Location and pricing decisions of a multi store monopoly in a spatial market. J. Reg. Sci. 44(3), 489–515 (2004)CrossRefGoogle Scholar
  4. 4.
    R. Abooliana, O. Bermanb, D. Krassb, Competitive facility location and design problem. Eur. J. Oper. Res. 182(1), 40–62 (2007)CrossRefGoogle Scholar
  5. 5.
    P.F. Zhu, Research on facility location of logistics company a under the competitive environment (in Chinese), Donghua University (2017)Google Scholar
  6. 6.
    Y.X. Yang, G.G. Zhou, Study on location model of facility competition for closed loop supply chain network (in Chinese). Chin. J. Manag. Sci. 19(5), 50–57 (2011)Google Scholar
  7. 7.
    L.X. Zhang, H. Tang, Research on two objective competitive location based on opportunity constraint (in Chinese). Chin. Market 4, 39–42 (2015)Google Scholar
  8. 8.
    L.L. Sheng, C.X. Wang, Competitive location of logistics distribution centers considering carbon emission (in Chinese). J. Shanghai Marit. Univ. 35(3), 51–56 (2014)Google Scholar
  9. 9.
    C. Cheng, Y. Zhang, Z.J. Xue, M.Y. Qi, A single-level mixed-integer programming model for the competitive facility location problem (in Chinese). Ind. Eng. J. 20(5), 21–27 (2014)Google Scholar
  10. 10.
    Y. Gao, Research on competitive location selection with customers choice behavior (in Chinese), Shenzhen University (2017)Google Scholar
  11. 11.
    D.L. Huff, Defining and estimating a trade area. J. Market. 28(3), 34 (1964)CrossRefGoogle Scholar
  12. 12.
    D.L. Huff, A programmed solution for approximating an optimum retail location. Land Econ. 42(3), 293–303 (1966)CrossRefGoogle Scholar
  13. 13.
    M. Nakanishi, L.G. Cooper, Parameter estimation for a multiplicative competitive interaction model: least squares approach. J. Mark. Res. 11(3), 303–311 (1974)Google Scholar
  14. 14.
    R.L. Shen, J.Z. Huo, Flow-interception facility location problem under competitive conditions (in Chinese). Oper. Res. Manag. Sci. 3, 97–101 (2013)Google Scholar
  15. 15.
    P.B. Mirchandani, R. Rebello, A. Agnetis, The inspection station location problem in hazardous material transportation: some heuristics and bounds. INFOR Inf. Syst. Oper. Res. 33, 100–113 (1995)Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Department of Management EngineeringQingdao University of TechnologyQingdaoChina

Personalised recommendations