A Bilevel Competitive Facility Location Model with Competitor’s Response

We are concerned with a problem in which a new entrant leader firm aims at finding the location and attractiveness of each new facility to maximize its profit where there are existing facilities belonging to a competitor. The competitor reacts to the leader by adjusting the attractiveness levels of its existing facilities to maximize its profit. We first formulate a bilevel mixed-integer nonlinear programming model. Then, we convert it into an equivalent single level mixed-integer nonlinear program and solve it using global optimization methods