Abstract
When a firm locates a new plant, and begins producing and shipping product to markets, this typically stimulates reactions by other firms supplying those markets. This suggests that to truly make a profit maximizing location decision, a firm must anticipate the market's reaction in the location decision-making process. In this paper, we review the development of a class of models designed to determine the profit maximizing location decision for a firm seeking to establish a manufacturing facility (or facilities) on a network characterized by either competitive or oligopolistic economic competition. One particular model from this class is presented, and the importance of anticipating the reaction to a location decision is illustrated through numerical examples of the model.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 239-253 |
| Number of pages | 15 |
| Journal | Location Science |
| Volume | 3 |
| Issue number | 4 |
| DOIs | |
| State | Published - Dec 1995 |
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All Science Journal Classification (ASJC) codes
- Geography, Planning and Development
- Transportation
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Incorporating competitors' reactions in facility location decisions : A market equilibrium approach. / Tobin, Roger L.; Miller, Tan; Friesz, Terry L.
In: Location Science, Vol. 3, No. 4, 12.1995, p. 239-253.Research output: Contribution to journal › Article
TY - JOUR
T1 - Incorporating competitors' reactions in facility location decisions
T2 - A market equilibrium approach
AU - Tobin, Roger L.
AU - Miller, Tan
AU - Friesz, Terry L.
PY - 1995/12
Y1 - 1995/12
N2 - When a firm locates a new plant, and begins producing and shipping product to markets, this typically stimulates reactions by other firms supplying those markets. This suggests that to truly make a profit maximizing location decision, a firm must anticipate the market's reaction in the location decision-making process. In this paper, we review the development of a class of models designed to determine the profit maximizing location decision for a firm seeking to establish a manufacturing facility (or facilities) on a network characterized by either competitive or oligopolistic economic competition. One particular model from this class is presented, and the importance of anticipating the reaction to a location decision is illustrated through numerical examples of the model.
AB - When a firm locates a new plant, and begins producing and shipping product to markets, this typically stimulates reactions by other firms supplying those markets. This suggests that to truly make a profit maximizing location decision, a firm must anticipate the market's reaction in the location decision-making process. In this paper, we review the development of a class of models designed to determine the profit maximizing location decision for a firm seeking to establish a manufacturing facility (or facilities) on a network characterized by either competitive or oligopolistic economic competition. One particular model from this class is presented, and the importance of anticipating the reaction to a location decision is illustrated through numerical examples of the model.
UR - http://www.scopus.com/inward/record.url?scp=0029548286&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0029548286&partnerID=8YFLogxK
U2 - 10.1016/0966-8349(96)00001-0
DO - 10.1016/0966-8349(96)00001-0
M3 - Article
AN - SCOPUS:0029548286
VL - 3
SP - 239
EP - 253
JO - Location Science
JF - Location Science
SN - 0966-8349
IS - 4
ER -