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Optimal sizes of facilities on a linear market. (English) Zbl 0656.90030

Let n facilities be located on a bounded linear market and assume that demand for a homogeneous commodity is uniformly distributed along the market. Initially each facility has a given size which determines its attraction to the customers. Independently at each facility a profit function is maximized by selecting new facility sizes. The individual optima are then combined and the optimization procedure is repeated. In a series of tests it is shown that such a decentralized optimization procedure quickly converges to an overall equilibrium.

MSC:

90B05 Inventory, storage, reservoirs
91B60 Trade models
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