Philippine E-Journals

An Explicitly Dynamic Multi-Period Competitive Facilities Location Model with Demand Sharing

Richard C. Li | Bryan Gobaco

Discipline: Engineering, Technology

 

Abstract:

Competitive facility location analysis has gained considerable attention in the past years, perhaps due to the increasing presence and significant effects of competition on business profitability. Since the latter half of the 20" century, competitive facilities location models have been continuously studied, explored and extended by many researchers. With the belief that competition will continue to play a significant role in strategic business management and development, this research will therefore deal with a competitive location problem. This study also aims to resolve the limiting and unrealistic novelty assumption of past researches by considering demand sharing. In order to achieve these goals, a multi-period competitive facilities model was formulated that allows opening, dosing, and upgrading of a company's facilities in response to competitor actions or decisions. The model also incorporated the more realistic occurrence of demand sharing whenever customers deem competing facilities equally attractive. Demand sharing was also modeled to occur even if a facility is more attractive than another.