Question

A locally owned department store samples two customers in each of five geo-graphic areas to estimate consumer spending in its home appliances department. It is estimated that these customers are a good sample of the 10,000 customers the store serves. The number of customers in each area is C 1 = 1,500, C 2 = 2,500, C 3 = 1,000, C 4 = 3,000, and C = 5 2,000. It is found that the two consumers have the following budgets in dollars for home appliances per year: B11 = 100, B 12 = 150; B 21 = 75, B 22 = 100; B 31 = 125, B 32 = 125; B 41 = 100, B 42 = 120; and B 51 = 120, B 52 = 125.
a. Using the Huff retail location model, estimate annual home appliance sales for the store.
b. Bull’s- Eye, a chain department store, opens a branch in a shopping complex near by. The Bull’s- Eye branch is three times larger than the locally owned store. The travel times in minutes from the five areas to the two stores ( j = 1 for the locally owned store, j = 2 for Bull’s- Eye) are T 11 = 20, T 12 = 15; T 21 = 35, T 22 = 20; T 31 = 30, T 32 = 25; T 41 = 20, T 42 = 25; and T 51 = 25, T 52 = 25. Use the Huff retail location model to estimate the annual consumer expenditures in the home appliance section of each store assuming that l = 1.


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  • CreatedAugust 22, 2015
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