The competitive location problem with customer switching behavior of congested facility

Abstract

Customer switching behavior refers to the action of a customer switching from one supplier of a product or service to another one. Among competing facilities, this behavior can be described as a customer switching from a facility, providing a certain kind of service, to a similar facility. In reality, customers in congested facilities are more prone to switch. Competitive location model presented in this paper considered the effect of customer switching behavior on facility location in a competitive environment. With introducing several parameters to illustrate the whole process of customer switch, a competitive facility location model based on queuing theory is constructed. Then, by computing and analyzing a case, the influence of customer switching behavior on facilities' customer capture is explored. At last, the results are compared with a model without including customer switching, and the optimal solution is found altered.