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THE OPTIMAL LOCATIONS OF BRANCH FACILITIES AND MAIN FACILITIES WITH CONSUMER SEARCH *
Author(s) -
Braid Ralph M.
Publication year - 1996
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1996.tb01266.x
Subject(s) - phone , product (mathematics) , position (finance) , service (business) , business , facility location problem , computer science , operations research , marketing , mathematics , finance , geometry , philosophy , linguistics
. This paper examines the socially optimal locations of branch facilities (or small stores) and main facilities (or large stores) on a finite linear market that is uniformly populated from position 0 to position 1. Each consumer has a probability w of finding the desired service (or product) at a branch facility, and a probability 1 of finding the desired service (or product) at a main facility. Two types of consumer search are considered: phone search and visit search. Different assumptions are made about the numbers of branch facilities and main facilities (each involving one or two facilities of each type). Under visit search, the socially optimal locations of branch facilities tend to be closer to main facilities than under phone search, and this tendency is more pronounced for smaller values of w.