A Locational Optimization for Maximizing the Revenue of a Store in a Continuum of a Network

Abstract

This paper deals with a market in which consumers are continuously distributed on a network. Under this market, this paper proposes the Huff model on a network for estimating the demand of a store through the 'network distance space'. This model can estimate the demand exactly in terms of an explicit mathematical function, assuming that consumers are distributed uniformly on each link. With this demand function, a locational optimization problem of a retail store on a network is formulated and a method for solving this problem is shown.