The Importance of Including Reaction Functions and Analysis of Economic Equilibria in Facility Location Models: An Example

Throughout this book, we have reviewed the motivation for developing equilibrium facility location models, the individual components which comprise such models, as well as techniques for generating algorithms to solve these models. In this chapter, by means of several linked numerical examples, we further illustrate the potential insights which an equilibrium facility location modeling approach can identify. Specifically, we will compare the results of five different scenarios for making location decisions all based on the same data set to depict how the inclusion or exclusion of reaction functions can affect the quality of the solutions obtained.