A location-allocation problem for a web services provider in a competitive market

Web Services have become a viable component technology in distributed e-commerce platforms. Due to the move to high-speed Internet communication and tremendous increases in computing power, network latency has begun to play a more important role in determining service response time. Hence, the locations of a Web Services provider's facilities, customer allocation, and the number of servers at each facility have a significant impact on its performance and customer satisfaction. In this paper we introduce a location-allocation model for a Web Services provider in a duopoly competitive market. Demands for services of these servers are available at each node of a network, and a subset of nodes is to be chosen to locate one or more servers in each. The objective is to maximize the provider's profit. The problem is formulated and analyzed. An exact solution approach is developed and the results of its efficiency are reported.