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IMA Journal of Management Mathematics Advance Access originally published online on April 20, 2006
IMA Journal of Management Mathematics 2006 17(4):359-371; doi:10.1093/imaman/dpl005
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© The authors 2006. Published by Oxford University Press on behalf of the Institute of Mathematics and its Applications. All rights reserved.

Locating a service facility with some unserviced demand

Zvi Drezner1,** and Carlton Scott2

1 College of Business and Economics, California State University–Fullerton, Fullerton, CA 92834, USA, 2 The Paul Merage School of Business, University of California, Irvine, CA 92697, USA

** Email: zdrezner{at}exchange.fullerton.edu

The location of a facility in the plane when service availability is a convex decreasing function of the distance (distance decay) is considered. The total cost of the system consists of three components: (i) the cost of waiting in line for service, (ii) the cost of providing the service and (iii) the cost of lost demand. A generalized Weiszfeld algorithm and a global optimization technique are constructed and tested on problems of up to 10000 demand points assuming exponential decay in service. Both algorithms are very efficient.

Keywords: location; exponential decay; lost demand

Received May 2005. accepted on 15 February 2006.


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