A leaderfollower game in competitive facility location


Küçükaydn H., ARAS M. N., Kuban Altnel I.

Computers and Operations Research, cilt.39, sa.2, ss.437-448, 2012 (SCI-Expanded, Scopus) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 39 Sayı: 2
  • Basım Tarihi: 2012
  • Doi Numarası: 10.1016/j.cor.2011.05.007
  • Dergi Adı: Computers and Operations Research
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus
  • Sayfa Sayıları: ss.437-448
  • Anahtar Kelimeler: Competitive facility location, Hybrid tabu search heuristic, Leaderfollower game, Mixed-integer nonlinear programming
  • Boğaziçi Üniversitesi Adresli: Evet

Özet

We address the problem of locating new facilities of a firm or franchise that enters a market where a competitor operates existing facilities. The goal of the new entrant firm is to decide the location and attractiveness of its new facilities that maximize its profit. The competitor can react by opening new facilities, closing existing ones, and adjusting the attractiveness levels of its existing facilities, with the aim of maximizing its own profit. The demand is assumed to be aggregated at certain points in the plane and the new facilities of both the firm and the competitor can be located at predetermined candidate sites. We employ the gravity-based rule in modeling the behavior of the customers where the probability that a customer visits a certain facility is proportional to the facility attractiveness and inversely proportional to the distance between the facility site and demand point. We formulate a bilevel mixed-integer nonlinear programming model where the firm entering the market is the leader and the competitor is the follower. We propose heuristics that combine tabu search with exact solution methods. © 2011 Elsevier Ltd.