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Optimal Location of Discretionary Service Facilities

ODED BERMAN, RICHARD C. LARSON and NIKOLETTA FOUSKA
Transportation Science
Vol. 26, No. 3 (August 1992), pp. 201-211
Published by: INFORMS
Stable URL: http://www.jstor.org/stable/25768539
Page Count: 11
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Optimal Location of Discretionary Service Facilities
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Abstract

Automatic teller machines and gasoline service stations are two examples of a growing number of "discretionary service facilities." In consuming service from these facilities, a significant fraction of customers do so on an otherwise preplanned trip (e.g., on the daily commute to and from work). A system planner, in determining the best locations of such facilities, is more concerned with placing the facilities along paths of customer flow rather than, say, near the center of a cluster of residences or work places. We formally model this problem and present a method for determining the optimal locations of m discretionary service facilities so as to intercept the maximum possible potential customer flow. We also show how to determine the minimal number of facilities required to intercept a prespecified fraction of total customer flow. Computational results are included.

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