Timing market entry with a contribution-maximization approach to location-allocation decisions

This paper develops a multiperiod model which considers revenue and cost effects of location-allocation decisions. The dynamic model is formulated as a zero-one linear program and is interpreted as a vehicle for analyzing the timing of entry into markets.The paper examines an important special case of the model which applies under the assumptions of non-negative contributions from all potential allocations and monotonically non-decreasing demands over time. For this special case, an exact algorithm is developed and is shown to be substantially more efficient than a general-purpose code for zero-one problems. The new algorithm is capable of solving practical-sized versions of the model with moderate computational requirements.