Locating Competitive Service Facilities in Uncertain Market Using the Flow Intercepting Spatial Interaction Model

In this paper, two new models based the flow intercepting spatial interaction model (FISIM), are formulated to locate competitive service facilities under the scenario-based market demand uncertainty. Service facilities compete with preexisting competitive facilities and with each other, to capture their demand from both "dedicated" customers making a special purpose trips to obtain their service and from "intercepting" customers purchasing service as part of routine pre-planned trip. Both maximizing minimum objective and minimizing maximum regret approaches can be used to treat the uncertainty in market demand. An efficient heuristic method is proposed and illustrated with a numerical example.