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Optimization of competitive facility location for chain stores

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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.

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  1. http://www.explainz.com/explanations/business/location-pricing.

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Acknowledgements

This work was supported in National Natural Science Foundation of China 51578112 and 71571026, and the Fundamental Research Funds for the Central Universities DUT16YQ104.

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Authors and Affiliations

  1. School of Transportation Science and Engineering, Beihang University, Beijing, 100191, China

    Wenxuan Shan

  2. Transportation Management College, Dalian Maritime University, Dalian, 116026, China

    Wenxuan Shan

  3. School of Automotive Engineering, Dalian University of Technology, Dalian, 116024, China

    Qianqian Yan, Chao Chen, Mengjie Zhang & Baozhen Yao

  4. Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, 200240, China

    Xuemei Fu

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  1. Wenxuan Shan
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Correspondence to Baozhen Yao.

Appendices

Appendix 1

See Table 5.

Table 5 Demands of communities
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Appendix 2

See Table 6

Table 6 Parameters in models
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Appendix 3

See Fig. 8

Fig. 8
figure 8

Networks of Case 1 and Case 3. a The network of Case 1, b the network of Case 3

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Shan, W., Yan, Q., Chen, C. et al. Optimization of competitive facility location for chain stores. Ann Oper Res 273, 187–205 (2019). https://doi.org/10.1007/s10479-017-2579-z

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