A Modification of the Modified Stollsteimer Location Moled

Extract

The Stollsteimer plant location model is a normative tool appropriate for deterrmning least-cost number, size and location of a subindustry's marketing facilities. Several modification and extensions of the basic model have increased its value to the applied economist. Ladd and Halvorson developed a procedure to determine sensitivity of the optimal solution to variation in model parameters, i.e., the researcher may resolve how magnitude cost parameters are altered before the solution becomes non-optimal. The basic model's solution procedure prevented application where large numbers of potential plant sites were involved. A recent modification by Warrack and Fletcher effects a reduction in required computer time by approximating optimization, thus increasing size of plant location problems investigated. Polopolus extended the basic model to encompass multiple product plants and, in collaboration with Chern, modified the basic Stollsteimer model to permit substitution of a discontinuous, long-run plant cost function for the strategically assumed continuous linear form. Prior to the latter modification, the basic model accommodated only a long-run total plant cost function which was linear with a positive intercept.