Sensitivity analysis of a continuous multifacility competitive location and design problem

Abstract

A continuous location problem in which a firm wants to set up two or more new facilities in a competitive environment is considered. Other facilities offering the same product or service already exist in the area. Both the locations and the qualities of the new facilities are to be found so as to maximize the profit obtained by the firm. This is a global optimization problem, with many parameters to be estimated, and whose behavior is not really well understood. Using random problems and a robust evolutionary algorithm recently proposed for solving this problem, the behavior of optimal solutions in various environments and changes in the basic model parameters are researched. These comprise the quality of existing and new facilities, cost function and presence of the chain. Some economic implications are derived.