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Location-Allocation Models for Retail Site Selection


Location-Allocation Models for Retail Site Selection

By Anthony C. Lea and Jim Simmons

This research paper introduces readers to the practical applicatios of location-allocation (L-A) models in the site selection process of retail chains.

Location-allocation modelling was originally developed to solve site selection problems in the public sector for activities such as schools, fire stations and medical facilities; in those situations where an agency needs to obtain the most efficient distribution of a system of facilities according to various non-market criteria.  As such, this paper uses an example from the Toronto metropolitan area to explore the use of L-A in a simple site selection problem from a retail perspective and demonstrates that location-allocation can be a powerful weapon to explore strategic problems facing commercial companies.

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