Competitive Facility Location Problem with Foresight in Discrete Space based on Tabu Search

Abstract—This paper presents the competitive facility location problem with foresight in the discrete space which considers probabilistic customer behavior. A practical bilevel nonlinear integer programming model is formulated to maximize the leader’s market share while predicting the follower’s response. For solving the model, a two-stage hybrid tabu search algorithm is designed. To illustrate the effectiveness of the proposed algorithm, a set of randomly generated instances are presented and analyzed statistically. The results indicate that the proposed algorithm provides an effective means to solve the problems. Keywords—competitive facility location problem; discrete space; gravity-base model; tabu search I