Assume that there are three shopping locations with 500,1,000,and 3,000 square feet of space allocated to outdoor lighting fixtures.A group of potential customers lives 5 minutes from the first location,10 minutes from the second location,and 15 minutes from the third location.The retailer estimates the effect of travel time to be 1.The probability of consumers' shopping at location two is ________.
A) 10 percent
B) 15 percent
C) 25 percent
D) 33 percent

Question

Quizplus · Accepted Answer

The probability of consumers shopping at location two can be calculated using the Huff Model for retail location attractiveness, which considers both the size of the store (as a proxy for its attractiveness) and the distance (or travel time) to the store. The formula for the probability $P_j$ of a consumer choosing a particular location $j$ is given by:$$P_j = \frac{S_j / T_j}{\sum_{i=1}^{n} (S_i / T_i)}$$where $S_j$ is the size of location $j$, $T_j$ is the travel time to location $j$, and the denominator is the sum of the attractiveness (size divided by travel time) of all locations.Given:- $S_1 = 500$, $T_1 = 5$- $S_2 = 1000$, $T_2 = 10$- $S_3 = 3000$, $T_3 = 15$The attractiveness of each location is:- Location 1: $500 / 5 = 100$- Location 2: $1000 / 10 = 100$- Location 3: $3000 / 15 = 200$The sum of attractiveness scores is $100 + 100 + 200 = 400$.The probability of shopping at location 2 is:$$P_2 = \frac{100}{400} = 0.25$$ or 25 percent.

Assume That There Are Three Shopping Locations with 500,1,000,and 3,000