Evaluation of retail site location using consumer preference and Voronoi models

One of the most important decision problems in the retail market is where to locate a new retail store. The customers usually select a store for shopping according to their own preferences and store locations. This paper proposed an additively weighted and multiplicatively weighted Voronoi diagrams (AWMWVD) to model the trade areas of retail stores. The AWMWVD model uses the customer utility which is an aggregate measure of effects of the store location, the store attractiveness and the store history. The model provides a visual representation for the location strategy of a retail chain. Based on the AWMWVD model, we present a new-site placement algorithm which identifies the most potential location for the new retail site deployment.