Operations Research, Systems Engineering and Industrial Engineering Commons^™

Joint Location And Cost Planning In Maximum Capture Facility Location Under Random Utilities, Ngan H. Duong, Tien Thanh Dam, Thuy Anh Ta, Tien Mai

Research Collection School Of Computing and Information Systems

We study a joint facility location and cost planning problem in a competitive market under random utility maximization (RUM) models. The objective is to locate new facilities and make decisions on the costs (or budgets) to spend on the new facilities, aiming to maximize an expected captured customer demand, assuming that customers choose a facility among all available facilities according to a RUM model. We examine two RUM frameworks in the discrete choice literature, namely, the additive and multiplicative RUM. While the former has been widely used in facility location problems, we are the first to explore the latter in …