Operations MGMT

A community is currently being served a single self-serve gas station six pumps. A

competitor is opening a new facility with 12 pumps across town. The table below shows the

travel times in minutes from the four different areas in the community to the sites and the

number of customers in each area.

(a) Using the Huff retail location model and assuming that ? = 2, calculate the probability of

a customer traveling from each area to each site.

(b) Estimate the proportion of the existing market lost to the new competitor.

Travel Times to Gas Stations

Area Area 1 Area 2 Area 3 Area 4

Old Station 5 10 9 15

New Competitor 20 8 12 6

No. of Customers 100 150 80 50(