Factors Influencing Network Design Decisions ▣Competitive Factors 1-b 0 1 If total demand is 1,Firm 1 locates at point a,and Firm 2 locates at point 1-b,the demand at the two firms,d1 and d2,is given by di=a+I-b-a and d2= 1+b-a 2 2 Both firms maximize their market share if they move closer to each other and locate at a =b=1/2. SCM by J.J.Gao SEIEE AU406 6SEIEE AU406 + - 6 SCM by J. J. Gao Factors Influencing Network Design Decisions  Competitive Factors  If total demand is 1, Firm 1 locates at point a, and Firm 2 locates at point 1-b, the demand at the two firms, d1 and d2, is given by  Both firms maximize their market share if they move closer to each other and locate at a =b =1/2