Location allocation models allow the investigation of the effects on profitability of one store in a chain if another store is added in the same trading area.

Question

Quizplus · Accepted Answer

Location allocation models are used to determine the optimal distribution of stores among different trading areas to maximize profitability. These models take into account factors like customer demand, competition, and operating costs to determine the ideal number and location of stores in a given market. By using these models, businesses can evaluate the potential impact of adding a new store to an existing trading area, and adjust their strategy accordingly.

Location Allocation Models Allow the Investigation of the Effects on Profitability