SPATIAL INTERACTION (Or GRAVITY) MODEL

BA 308B

Dr. Campbell

SPATIAL INTERACTION (or GRAVITY) MODEL

Given several population centers and several retail or service facilities, estimate the proportion of demand from each population center that is served by each facility.

n = number of facilities

Sj= size of facility j (e.g., ft2)

Ci= total demand at city (population center) i (e.g., $/yr)

Tij = travel time from city i to facility j

Pij= proportion of demand from city i served by facility j

Eij= estinated demand from city i served by facility j

Example: Consider building a new shopping center at Riverport. Suppose this will compete directly with two other major shopping centers: The Galleria and Northwest Plaza.

Size (Sj):GA - Galleria1,300,000 square feet

NW - Northwest Plaza1,700,000 square feet

RP - Riverport1,500,000 square feet

Revenues (Ci): N - North St. Louis County$ 15 million/year

C - Central St. Louis County$ 20 million/year

W - West St. Louis County$ 25 million/year

S - St. Charles County$ 10 million/year

Total$ 70 million/year

Travel Time (minutes):

(1) Calculate Sj/Tij2.

(2) Sum for each city (to get denominator of Pij).

(3) Calculate Pij.

(4) Calculate Eij.

Total estimated revenue for Riverport = $ 22.2 million/year.

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