Article,
A congested facility location problem with strategic customers
Contributors
Marand, Ata Jalili
0000-0002-4264-4045
(Corresponding author)
[1]
Hoseinpour, Pooya
0000-0003-1003-053X
[2]
Affiliations
- [1] Aarhus University [NORA names: AU Aarhus University; University; Denmark; Europe, EU; Nordic; OECD];
- [2] Amirkabir University of Technology [NORA names: Iran; Asia, Middle East]
Abstract
This study addresses a user-equilibrium congested facility location problem with delay-, accessibility-, and price-sensitive customers. A profit-maximizing service provider first makes location, service rate, and pricing decisions, and then strategic customers decide which facilities to patronize (if any). By incorporating the customers’ choice behavior as a set of equilibrium constraints into the service provider’s decision problem, the problem is modeled as a mixed integer non-linear program which is then reformulated as a mixed integer second-order cone program. The proposed model, tested on several standard instances, is shown to be efficiently solvable using commercial software packages.
Keywords
behavior,
choice behavior,
commercial software packages,
cone programming,
constraints,
customer choice behavior,
customers,
decision,
decision problem,
equilibrium,
equilibrium constraints,
facilities,
facility location problem,
instances,
integer,
integer second-order cone programming,
location,
location problem,
model,
non-linear programming,
package,
price,
price-sensitive customers,
pricing decisions,
problem,
profit-maximizing service provider,
program,
providers,
rate,
second-order cone programming,
service providers,
service rate,
services,
software package,
standard instances,
strategic customers,
study
