Optimizing pricing and location decisions for competitive service facilities charging uniform price
| Autor: | Oded Berman, Dmitry Krass, Robert Aboolian |
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| Rok vydání: | 2008 |
| Předmět: |
Marketing
021103 operations research Operations research business.industry Strategy and Management 0211 other engineering and technologies Information technology 02 engineering and technology Management Science and Operations Research Profit (economics) Purchasing Management Information Systems Nonlinear programming Capacity planning Benefice Demand curve 0202 electrical engineering electronic engineering information engineering Economics 020201 artificial intelligence & image processing Project management business |
| Zdroj: | Journal of the Operational Research Society. 59:1506-1519 |
| ISSN: | 1476-9360 0160-5682 |
| DOI: | 10.1057/palgrave.jors.2602493 |
| Popis: | In this paper, we present the problem of optimizing the location and pricing for a set of new service facilities entering a competitive marketplace. We assume that the new facilities must charge the same (uniform) price and the objective is to optimize the overall profit for the new facilities. Demand for service is assumed to be concentrated at discrete demand points (customer markets); customers in each market patronize the facility providing the highest utility. Customer demand function is assumed to be elastic; the demand is affected by the price, facility attractiveness, and the travel cost for the highest-utility facility. We provide both structural and algorithmic results, as well as some managerial insights for this problem. We show that the optimal price can be selected from a certain finite set of values that can be computed in advance; this fact is used to develop an efficient mathematical programming formulation for our model. |
| Databáze: | OpenAIRE |
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