Research On Competitive Location Selection With Customers' Choice Behavior

Location selection is the first step of the enterprise to enter the new market or open up the market,which has a significant impact on business operations because of its one-time and large investment characteristics,so it has taken the community's attention;and the competitive locatio n is indispensable in the logistics industry where the competitive environment is extremely fierce,it is not only related to the market operation of the site enterprises,but also has an important influence on the operation of the competitors' enterprises even the whole competitive market.Competitive location means there are two or more competitors who offer similar products and services for market share in the competitive market,competing for greater market share by locating new facilities.Based on the market competition situa tion of the logistics industry,this paper has made a related study on the competitive location.Based on the consideration of location cost,this paper examined two competitors who provide similar services or products how to locate in a competitive enviro nment to maximize its market profits.This paper mainly analyzed the follower competitors how to locate in the competitive environment,considering the impact of business district,within business district different demand areas have different demand,the cost of new site selection is also not same,and the establishment of new facilities in this market may cause changes in market demand.This article assumed that the customers only select the facilities in different brands that are closest to each other,which means all the competitive facilities of different brands that are closest to the customers can share the market demand;and customers have preference for different brands,combined with the brand preference,this paper introduced logit utility functio n into the competitive location model to represent the customer's choice of competitive facilities and obtain the market share of different brands facilities which are nearest to customers.Based on the above analysis,the cost of location selection was considered and the maximum market profit model was established for the followers,in which the market share includes both already existed and selected candidate points.In this paper,two heuristic algorithms were used to solve the problem: genetic algorithm(GA)and greedy adding and substitution(GAS),and the exact algorithm-enumeration method was used to verify the two heuristic algorithms' accuracy in case analysis,and the two heuristic algorithms' accuracy and efficiency were compared in three different sizes problems of small,medium and large.The case examples showed that the efficiency of the algorithm is not the same for different sizes problems,and for smaller case,both efficiency and optimal solution of the greedy algorithm is better;For larger case,the optimal value of the genetic algorithm is not very different from the greedy algorithm,but its operation efficiency is much higher than the greedy algorithm,and the genetic algorithm is more suitable.