Huff location model

  1. Utilizing a spreadsheet version of the Huff location model (with λ = 1.0), recommend a store size and location for AFI. Assuming that AFI does not wish to consider a store that is smaller than 10,000 square feet, assess the store sizes (based on 5,000-square-foot increments) up to the maximum allowable sales area for each potential site.
 
  1. What is the expected annual net operating profit before taxes and expected market share for the outlet you have recommended? Defend your recommendation.
 
  1. Try two other values of λ (e.g., 0.5 and 5.0) to measure the sensitivity of customer travel propensity on your recommended location.
     

Sample Solution