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Plastria, Frank; Vanhaverbeke, Lieselot

Maximal covering location problem with price decision for revenue maximization in a competitive environment. (English) Zbl 1163.90612

OR Spectrum 31, No. 3, 555-571 (2009).
Summary: We extend the classical maximal covering model in a competitive environment by including a price decision. We formulate a revenue maximization model and propose two procedures to solve it. By a careful examination of the relationships between the maximal covering problems for different prices, we reveal interesting properties of the deduced revenue maximization model, leading to a full enumeration solution approach. With the help of two more properties we develop a second, more intelligent solution procedure. Computational experiments show promising results for a small, medium and large case study.

Cited in 6 Documents

MSC:

90B80 Discrete location and assignment
90C11 Mixed integer programming
91B24 Microeconomic theory (price theory and economic markets)

Keywords:

competitive location; spatial pricing; revenue maximization; maximal covering problem; mixed integer programming
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References:

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