A location problem of an entering firm’s facilities in a competitive environment

The authors deal with a type of location problem of an entering firm’s facilities when the price competition with existing firms is taken into consideration. This problem can be considered as a two-stage problem. In the first stage, the authors discuss the propositions of the equilibrium price policy and the equilibrium price at market for a given location of the entering firm’s facilities. In the second stage, using the equilibrium prices of the rival firms computed at the first stage, they formulate a location problem to decide an optimal location set of the entering firm’s facilities with a budget constraint on the total construction cost.