Submodularity and local search approaches for maximum capture problems under generalized extreme value models

DOI10.1016/J.EJOR.2021.09.006zbMATH Open1506.90136arXiv2102.05754OpenAlexW3199535320WikidataQ114184421 ScholiaQ114184421MaRDI QIDQ2116913FDOQ2116913

Tien Mai, Thuy Anh Ta, Tien Thanh Dam

Publication date: 18 March 2022

Published in: European Journal of Operational Research (Search for Journal in Brave)

Abstract: We study the maximum capture problem in facility location under random utility models, i.e., the problem of seeking to locate new facilities in a competitive market such that the captured user demand is maximized, assuming that each customer chooses among all available facilities according to a random utility maximization model. We employ the generalized extreme value (GEV) family of discrete choice models and show that the objective function in this context is monotonic and submodular. This finding implies that a simple greed heuristic can always guarantee an (1-1/e) approximation solution. We further develop a new algorithm combining a greedy heuristic, a gradient-based local search and an exchanging procedure to efficiently solve the problem. We conduct experiments using instances of difference sizes and under different discrete choice models, and we show that our approach significantly outperforms prior approaches in terms of both returned objective value and CPU time. Our algorithm and theoretical findings can be applied to the maximum capture problems under various random utility models in the literature, including the popular multinomial logit, nested logit, cross nested logit, and the mixed logit models.

Full work available at URL: https://arxiv.org/abs/2102.05754

zbMATH Keywords

facilities planning and designgreedy heuristicmaximum capturerandom utility maximizationgeneralized extreme value

Mathematics Subject Classification ID

Approximation methods and heuristics in mathematical programming (90C59) Discrete location and assignment (90B80)

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Cited In (6)

• Store location with multipurpose shopping trips and a new random utility customers' choice model
• Joint location and cost planning in maximum capture facility location under random utilities
• Improved approximation algorithms for \(k\)-submodular maximization under a knapsack constraint
• Sequential customers' decisions in facility location with comparison-shopping
• The follower competitive facility location problem under the nested logit choice rule
• Fractional 0-1 programming and submodularity

Uses Software

• Bonmin

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