Competitive Location Problem For Chain Convenient Stores Based On The Maximum Capture Models

With the rapid development of Chinese economy and the gradual expansion of customers’ demand,chain convenient stores,as an universal retail format,ushered in a golden period of development.The large scale of convenient stores greatly meets the demand of customers for small and medium-sized shopping which also changes the behavior of customers.Due to the high homogeneity of the commodities,location strategy plays a key role in the chain convenient stores.It is also regarded as "the industry of location".Nevertheless,the rapid expansion of stores makes the traditional location method based on artificial experience unable to match the current location needs.A more efficient and intelligent location method is needed to improve the company’s market share,reduce the cost of location decision,and avoid resource waste caused by improper locations.The maximum capture model provides a feasible solution to solve the location problems in a competitive market.It simulates customers’ behavior decision with utility function with the objective of maximizing the market share.In this paper,we focus on the location problem of the chain convenient stores based on the typical characteristics of it and extend the traditional maximum capture model with multi-commodity and multi-facility scenarios considered.In addition,we propose new models considering the influence of loyalty membership system under deterministic and dynamic circumstances.The explicit work is shown as follows:(1)Location model of convenient stores with multi-commodities and multi-facilities considered:This work studies how the new entrant make location decision with multi-commodities and multi-facilities considered under the cost constraint in a competitive environment.Since the model is nonlinear and proved to be NP-hard,we linearize the objective by introducing additional variables to make the original model a 0-1 mixed integer linear programming problem.(2)Multi-commodity and multi-facility convenient store location model with consideration of loyalty membership system:This work studies the case when the convenient store company needs to make multi-facility location decision with a complete loyalty membership system has been established which influences the customers’ selection.(3)Multi-commodity and multi-facility convenient store location model with consideration of loyalty membership system under dynamic circumstance:This work studies the case when the convenient store company needs to make multi-facility location decision with its own complete loyalty membership system to be established to compete with that of competitors.Efficient location selection has become a problem urgent to solve for the new entrant under the situation of competition.The location models we have proposed in this paper provide decision-making support for the convenient store enterprise in typical scenarios which play key roles for the enterprise to cope with the current high-speed expansion.