Attraction-Rejection Model for Facility Location

Abstract

Location of small and large stores requires a market study to determine the demand for a product in a particular region, as well as the selection of the target population. However, it is common to forget analyzing the impact of the competition regarding the suitability of locating facilities. The objective of this work is to propose a model that can be a tool to study the market; analyzing both demands as attraction factor and competition as rejection factor. The methodology used consists on the proposal of an exact model and a group of tests to prove its functionality. The model has characteristics that have not been considering before like a service radio where a new location can be open and is affected by customers and competitors. The results obtained demonstrated that the model suggests opening the facilities with fewer competitors and higher demand. This model is new because no other model considers how a new location is affected by competitors (rejection) and by customers (attraction), both located in a service radio area.