Location Models for Ceding Market Share and Shrinking Services

UPF Working Paper No. 753

13 Pages Posted: 12 Jul 2004

See all articles by Daniel Serra

Daniel Serra

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Alan T. Murray

Ohio State University (OSU) - Geography

Charles ReVelle

Deceased

Date Written: May 2004

Abstract

New location models are presented here for exploring the reduction of facilities in a region. The first of these models considers firms ceding market share to competitors under situations of financial exigency. The goal of this model is to cede the least market share, i.e., retain as much of the customer base as possible while shedding costly outlets. The second model considers a firm essentially without competition that must shrink it services for economic reasons. This firm is assumed to close outlets so that the degradation of service is limited. An example is offered within a competitive environment to demonstrate the usefulness of this modeling approach.

Keywords: De-location, shrinkage, covering models

JEL Classification: C61, J80

Suggested Citation

Serra, Daniel and Murray, Alan Todd and ReVelle (deceased), Charles, Location Models for Ceding Market Share and Shrinking Services (May 2004). UPF Working Paper No. 753. Available at SSRN: https://ssrn.com/abstract=563381 or http://dx.doi.org/10.2139/ssrn.563381

Daniel Serra (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34) 93 542 16 66 (Phone)
(34) 93 542 17 46 (Fax)

Alan Todd Murray

Ohio State University (OSU) - Geography ( email )

1036 Derby Hall
154 North Oval Mall
Columbus, OH 43210
United States

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