Research on Competitive Multi-facility Location with Market Expansion

It is critical to locate facilities in the retail operations, especially in competitive environment. In most competitive location models available in the literatures, demand is assumed to be fixed or random regardless of market conditions. However, demand is related to the number of facilities, service capacity or the distance from the facility to the customer, which is considered in few literatures. In this paper, a competitive multi-facility location model with fixed demand is established and then market expansion is taken into account in the model. The Plant Growth Simulation Algorithm (PGSA) is put forward to solve the two models and then a small numerical example is given. Compared to the problem with fixed demand, the optimum solution of facility location is variable and the profit increases obviously with market expansion considered.