Page 23 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 1, 2023, pp. 21-34

The main aim of this study is theoretical expansion of sale agents locating models. In
previous locating models, the city has been considered as linear (one street) with one
or two agents. However, in the present study, more real assumptions are considered
and a city with S streets, n consumers who are uniformly distributed on each street
and K sale agents are included in the research model. Moreover, as far as in real world,
the market is not optimally covered by the agents and the number of agents in some
areas is high and in some areas is low, finding optimal condition for distribution of
agents and the exclusive decision making interval on the number and location of sale
agents are the other objectives of this paper. This paper is organized in five parts.
After introduction, review of literature will be presented in the second part. The
research model is presented in third part and the fourth part includes the selection of
location and the number of sale agents. Research conclusion is presented in the fifth
and final part.

EXPERIMENTAL RESEARCH BACKGROUND
The oldest location model dates back to Saffle in 1878. Thinkers such as Lanhart in
1882 and Alfred Veber in 1909 completed and proposed new location models by
World War II. Competitive positioning models with a game theory approach were
first introduced by Hotelling in 1929. Subsequent research is needed to improve one
or more of the assumptions of the Hotelling model and to make it more general (such
as Salop 1979, Chen & Riordan 2007 and etc). The most important point in these
generalizations is that competitive location models are inherently unstable, In other
words, with the slightest change in an assumption or a parameter, completely different
results will be obtained. It should be noted that the number of theoretical studies in the
field of modeling of location models of firms is very limited (mentioned above) and
therefore in the following part, some of the studies focusing on the locating of sale agents
will be reviewed.

Barahona & Jensen (1998) solved the issue of locating distribution centers along with
fixed storage cost with the aim of reducing the costs through integer linear
programming (ILP) and Santzig-Wolfe method. Weber (2001) investigated the
cooperation with sale representatives in business market and asserted that the
cooperation between suppliers and sale agents is rarely taken into account. The main
aim of this study was to introduce the relation between supplier and sale agent with
tracking of evolution path of supplier and sale agent with introducing an emerging set
of design solutions for more efficient cooperation of supplier and sale agent. Chen et
al. (2007) in their study solved fuzzy-location multi-criteria optimization of
distribution centers with the aim of cost minimization of supply chain, increasing on
time decision making power in probable demand and decreasing transportation cost
through linear multi-objective planning and two-stage fuzzy decision making.

23