Reference : A leader-follower game in competitive facility location
Scientific journals : Article
Business & economic sciences : Production, distribution & supply chain management
http://hdl.handle.net/2268/138825
A leader-follower game in competitive facility location
English
Kucukaydin, Hande [Université de Liège - ULiège > HEC-Ecole de gestion : UER > UER Opérations : Supply Chain Management >]
Aras, Necati [> >]
Altinel, I. Kuban [> >]
Feb-2012
Computers and Operations Research
Pergamon Press
39
2
437-448
Yes (verified by ORBi)
International
0305-0548
Oxford
United Kingdom
[en] competitive facility location ; leader-follower game ; mixed-integer nonlinear programming ; hybrid tabu search heuristic
[en] 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.
http://hdl.handle.net/2268/138825
10.1016/j.cor.2011.05.007

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