Rivalry and uncertainty in complementary investments with dynamic market sharing

Collection Location Koleksi E-book & E-Journal Perpustakaan Pusat Unila
Edition vol.271issue 2
Call Number
ISBN/ISSN 15729338
Author(s) Azevedo, Alcino
Paxson, Dean
Subject(s) Business and Management
Classification NONE
Series Title
GMD E-Journal
Language English
Publisher Springer
Publishing Year 2018
Publishing Place Switzerland
Abstract/Notes Abstract We consider the issue of choosing a subset of locations to construct new housing developmentsmaximizingthesatisfactionofpotentialbuyers,whichhasnotbeenpreviously studied in the literature. The allocation of demands to the selected locations is modeled by a choicemodel,basedonthedistancetothelocation,real-estatepricesandincomes.Westudy two robust counterparts of the optimal location problem, where uncertainty lies on demand volumes for the first one, and on customer preferences for the second one. In both cases, the parameters subject to uncertainty appear both in the objective function and constraints. The second robust model combines a scenario-based approach with nominal, price-centric and distance-centricscenariosoncustomerspreferences,andanuncertaintybudgetapproachthat limits the number of customers that can deviate from the nominal scenario. We show that the subproblem of finding the worst-case deviation of parameters subject to uncertainty is tractable and leads to linear formulations of the robust problem. Computational experiments conducted on instances of the Paris region show that the average loss of value of the robust solution is reasonably low when compared to the optimal solution of deviated instances. We also derive insights for the new housing development issue. Keywords Robust Optimization · Multinomial logit choice models · Facility location · Housing
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