Deterministic Production/Location Models on Networks

Abstract

By restricting the production process to two inputs and the location space to a line segment, in chapter 2 we were able to investigate many of the salient features of the production/location interrelationships. Now the problem is generalized both in terms of the production variables and, more importantly, the feasible location set. In a practical sense most plant location decisions must be made with respect to some transportation network. Consequently, in this chapter we assume that the firm must make its production/location decision so as to locate on some given transport network. Any finite number of spatially distinct input and output markets are allowed, with their locations being at nodes of the network. First, a single-plant network problem is formulated along with a numerical example. Using methods similar to those in chapter 2, we then show that in many cases the set of optimal plant locations can be reduced to the node set of the network.