On minimax-regret Huff location models

Authors:
Lenys Bello;Rafael Blanquero;Emilio Carrizosa
Affiliations:
Universidad de Carabobo, Venezuela;Universidad de Sevilla, Spain;Universidad de Sevilla, Spain
Venue:
Computers and Operations Research
Year:
2011

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Abstract

We address the following single-facility location problem: a firm is entering into a market by locating one facility in a region of the plane. The demand captured from each user by the facility will be proportional to the users buying power and inversely proportional to a function of the user-facility distance. Uncertainty exists on the buying power (weight) of the users. This is modeled by assuming that a set of scenarios exists, each scenario corresponding to a weight realization. The objective is to locate the facility following the Savage criterion, i.e., the minimax-regret location is sought. The problem is formulated as a global optimization problem with objective written as difference of two convex monotonic functions. The numerical results obtained show that a branch and bound using this new method for obtaining bounds clearly outperforms benchmark procedures.