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WHERE SHALL WE SHOP TODAY? A THEORY OF MULTIPLE‐STOP, MULTIPLE‐PURPOSE SHOPPING TRIPS
Author(s) -
Narula Subhash C.,
Harwitz Mitchell,
Lentnek Barry
Publication year - 1983
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.1983.tb00809.x
Subject(s) - trips architecture , consumption (sociology) , utility maximization , maximization , process (computing) , time horizon , product (mathematics) , economics , microeconomics , business , computer science , operations research , mathematics , mathematical economics , sociology , social science , geometry , finance , parallel computing , operating system
We integrate into a neo‐classical multi‐period consumer choice model two new elements: (1) storage and holding activities within a household and (2) an “economic landscape” containing many stores at different distances from the house, that sell possibly different product lines at different prices. The theory leads to multipurpose shopping trips in the one‐household one‐store case. In the one‐household many‐store model, we prove the existence of optima by an enumeration argument. We describe an iterative maximization process that generates a cost‐minimizing “structure” of shopping trips. This “trip structure” defines a pattern of trips of different lengths to purchase different goods at relevant stores, so as to minimize the purchase and contextual (holding plus transport) cost of any level of consumption, with trip frequency and time‐spacing determined over the planning horizon.