Deterministic Production/Location Models on a Plane

Abstract

While firm-level applications often involve location on a network, models in which the firm can locate anywhere within a subset of a plane can be useful and important in several ways. Planar models may satisfactorily represent real situations when the underlying transport network is dense, or when transport costs are relatively proportional to Euclidean distances (e.g., when transport is performed by air or sea using company fleets). In addition, planar models permit more interesting, informative, and formal sensitivity analyses than do network models and are, accordingly, an important object of study.