Optimization of competitive facility location for chain stores

Wenxuan Shan, Qianqian Yan, Chao Chen, Mengjie Zhang, Baozhen Yao () and Xuemei Fu
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Wenxuan Shan: Beihang University
Qianqian Yan: Dalian University of Technology
Chao Chen: Dalian University of Technology
Mengjie Zhang: Dalian University of Technology
Baozhen Yao: Dalian University of Technology
Xuemei Fu: Shanghai Jiao Tong University

Annals of Operations Research, 2019, vol. 273, issue 1, No 7, 187-205

Abstract: Abstract The location affects the competitiveness and market share of a new entry enterprise, especially for a retail enterprise. This study focuses on the competitive location of new chain stores. In this paper, a bi-level model is proposed to formulate the competitive location problem. And the model also considers the pricing game between the new entry enterprise and the existing competitor. The model optimizes the location by maximizing the benefit on the principle of the Nash equilibrium. A heuristic algorithm is proposed to solve the model. Results show the feasibility of the proposed model and provide managerial insights for decision makers to determine an appropriate location.

Keywords: Competitive facility location; Bi-level model; Pricing game; Nash equilibrium; Chain stores (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s10479-017-2579-z

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