This is a book about the simultaneous location, production and distri bution decisions of a firm entering a competitive market whose spatial nature is describable by a network in which the market either achieves an equilibrium or is equilibrium tending. As such, the problem is of clear theoretical and practical importance, for it is a rather general version of the problem faced by real firms every day in deciding where to locate. Further, the timeliness of this subject manifests itself in the growing excitement and interest found both in the research/academic communities and in the practitioner/private industry communities for more comprehensive approaches to competitive facility location analy sis and equilibrium modeling of networks. The desire both for new conceptual approaches yielding enhanced insights and for practical methodologies to capture these insights drives this interest. While nor mative, deterministic facility location modeling techniques currently provide valuable input into the location decision-making process, re searchers and practitioners alike have realized the vast and relatively untapped potential of more advanced location decision making tech niques. In this book, we develop what we believe represents a major new line of research in the field of competitive facility location analysis; namely, equilibrium facility location modeling. In particular, this book offers a number of innovations in the mathe matical analysis and computation of solutions to location models which we have pioneered and which are collected under a single cover for the first time.
This book emphasizes the interdependence of the location, production and
distribution decisions made by a firm operating over a network. It examines
why and how a firm must evaluate the link between these interdependent
decisions and the equilibrium conditions on the network where it locates.
As part of the development and presentation of location paradigms under
alternative market structures, this book provides a primer on algorithmic
approaches to solving equilibrium-constrained facility location models.
This includes an extensive introduction to the theory and methods of nonlinear
sensitivity analysis applied to equilibrium-constrained facility location
models, as well as an introduction to interdisciplinary modeling approaches
combining classical operations research techniques and microeconomics.
