A Model for Allocating Retail Outlet Building Resources across Market Areas

Many factors affect retail outlet profitability, including market potential, distribution and product costs, market pricing levels, cost (and availability) of land or space and the relationship between share of outlets and share of markets. A model is presented which was used to plan building decisions for outlets for a consumer product across time and across market arez The model has been in use for a number of years and has provided important input for budgetting and planning decisions. The implementation process for this model is also discussed. The model and its use provide an example of what the authors believe to be "successful" management science application — the characteristics of and reasons for this success are discussed.