Article ID: | iaor20134129 |
Volume: | 56 |
Issue: | 3 |
Start Page Number: | 983 |
End Page Number: | 1005 |
Publication Date: | Jul 2013 |
Journal: | Journal of Global Optimization |
Authors: | Fernndez J, Garca I, Redondo J, Arrondo A, Ortigosa P |
Keywords: | facilities, heuristics |
In this work, the problem of a company or chain (the leader) that considers the reaction of a competitor chain (the follower) is studied. In particular, the leader wants to set up a single new facility in a planar market where similar facilities of the follower, and possibly of its own chain, are already present. The follower will react by locating another single facility after the leader locates its own facility. Both the location and the quality (representing design, quality of products, prices, etc.) of the new leader’s facility have to be found. The aim is to maximize the profit obtained by the leader considering the future follower’s entry. The demand is supposed to be concentrated at