Service Management: Operations, Strategy, Information Technology 8th Edition by James Fitzsimmons,Mona Fitzsimmons,Sanjeev Bordoloi

Exercise 13

A community is currently being served by a single self-serve gas station with six pumps. A competitor is opening a new facility with 12 pumps across town. Table 10.12 shows the travel times in minutes from the four different areas in the community to the sites and the number of customers in each area.
a. Using the Huff retail location model and assuming that
, calculate the probability of a customer traveling from each area to each site.
b. Estimate the proportion of the existing market lost to the new competitor.