A Threshold‐Satisfying Competitive Location Model

Tammy Drezner, Zvi Drezner and Shogo Shiode

Journal of Regional Science, 2002, vol. 42, issue 2, 287-299

Abstract: In this paper we consider a location model based on the threshold concept. We find the best location such that the probability of revenue falling short of the threshold is minimized. This objective is appropriate when a firm will not survive if its revenue falls below a known threshold. A new store is to be located. Demand is not deterministic but rather has a statistical distribution. We seek the location at which the probability that the revenue (expressed as market share attracted by the new store) is below a given threshold is minimized. The model is formulated and solved, and computational results are given.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jregsc:v:42:y:2002:i:2:p:287-299

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