The use of GIS tools to support decision-making in the expansion of chain stores

Abstract

This article deals with a network competitive localization problem in which a firm seeks to determine the location of a new facility, which competes with all the facilities operating in the market, both belonging to the same firm and to the competing firms. In this context, two frequently conflicting objectives are involved: maximization of the total market share captured by the firm and minimization of market share losses for its existing facilities due to being captured by the new facility (cannibalization). We formulate the location problem as a multi-objective optimization model. Some GIS tools that provide some maps representing the market share and the cannibalization effect are proposed. This allows for the visualization of the effects produced by the opening of a new facility in the market and the trade-offs between the objectives. Finally, the advantages of using these tools have been shown by means of an application to a real data case.