A competitive facility location model with elastic demand and patronising behaviour sensitive to location, price and waiting time

This paper develops a model for facility location optimisation of an entrant firm in a competitive environment. Customers have elastic demand and behave probabilistically based on a utility function that depends on three factors, price, travelling time and waiting time at facilities. However, they do not know the exact waiting times when they are at their origins and plan to use the new or redesigned network for the first time. They amend their next decisions based on their observations on waiting times. The resulting non‐linear model is solved using Tabu Search. A set of experiments is performed to show the algorithm's efficiency.