Multi-unit retail site selection processes: Incorporating opening delays and unidentified competition

Multiunit site selection models have long ignored the impact of rime delays in store openings. To determine the effect of this limitation and to ident ify a solution, Mie compare three multiunit site selection procedures. The first is a sequential procedure that selects sires and then opens them one at a rime. The second is a global approach that selects all future sites in a single decision process. Third, is a proposed anticipated-delay procedur e that incorporates opening delays, Jinn planning horizons and discount rat es in determining appropriate sites for multiunit retail systems. I We furt her compare the results of these site-selection procedures to similar proce dures that incorporate leakage to unidentified competitors when seeking loc ations for new, outlets. We make the comparisons based upon discounted reve nues by using a two-part, game-like simulation. The simulation estimates re venue results under the various alternatives while allowing for reactive an d preemptive competitive store openings. Our results indicate that the anti cipated-delay procedure incorporating leakage produces a significantly bett er revenue stream than either the standard sequential or global approach pr ocedures.