Localization of firms in conditions of triangular distribution of consumers and uncertain quality of firms

Document Type: Original Article

Authors

1 Urmia university, Urmia, Iran

2 Tehran PNU University, Tehran, Iran

Abstract

One of the main problems of localization models is simplifying assumptions on consumers' distribution on the streets or city. Localization methods usually use uniform distribution patterns while in real world, this kind of distribution is unavailable and the consumers are mostly accumulated in centers rather than margins. Using triangular distribution for consumers and concerning uncertainty of the quality of products of enterprises, this paper deals with localization of enterprises. The results indicated that if the quality of products differs highly, then just one enterprise will sell its products in the market and if this difference is partial and negligible, then both enterprises will be active in the market. If either enterprise 1 or enterprise 2 is the only seller in the market, then it gets the highest price at final points. Furthermore, if the indifferent consumer is at the left side of center, then enterprise 1 will get the highest price at left margin (point 0) and if the indifferent consumer is at the right side of center, then enterprise 1 will get the highest price at right side (point 1) and in both conditions, enterprise 2 will get the highest price at center.

Keywords


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