Equity Maximizing Facility Location Schemes

Oded Berman and Edward H. Kaplan
Additional contact information
Oded Berman: University of Massachusetts at Boston, Boston, MA 02125
Edward H. Kaplan: Yale School of Organization and Management, New Haven, CT 06520

Transportation Science, 1990, vol. 24, issue 2, 137-144

Abstract: A plethora of methods exists for finding cost minimizing facility locations. However, it is generally true that once optimal locations have been found, the benefits derived from the facilities will not be distributed equally across customers due to differences in travel costs. Though some schemes aimed at providing more equitable facility locations have been proposed, none of these schemes are fully satisfactory in that there are always customers who are winners or losers with respect to the cost of travel. In this paper, we address the equity question using taxes (in the case of a central authority) or side payments (in the case of cooperating authorities) to redress benefit inequities. We show that the usual distance minimizing facility location formulations are still optimal, providing a very simple tax or side payment scheme is used to equalize benefits for all customers in the system. In the event that taxes or side payments cannot be utilized, our analysis leads to a natural method for locating facilities to minimize inequities. For the case of a single facility, the complexity of our approach is O ( n 4 ), where n is the number of customer demand points (nodes) in the service network.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://dx.doi.org/10.1287/trsc.24.2.137 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:24:y:1990:i:2:p:137-144

Access Statistics for this article

More articles in Transportation Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().