OPTIMAL CONTINUOUS LOCATION OF A RETAIL FACILITY, FACILITY ATTRACTIVENESS, AND MARKET SHARE - AN INTERACTIVE MODEL

In this paper a model for the location of a retail facility anywhere in the plane is presented. Existing location papers suggest that marketers can evaluate a set of potential sites for the location of a new facility. The site that maximizes the market share captured is selected. However, the best site for the new facility may not be included in the user provided set of potential sites. Finding the best location anywhere in the plane requires the analysis of the market share function which is addressed in this paper. In addition, a sensitivity analysis of both the best location and the market share captured is provided. Computational experiments illustrate the properties of this function and its sensitivity to the data parameters. The analysis shows that the market share captured by the facility (existing or new) is sensitive to both facility location and attractiveness.