Numericals

ESTIMATING POTENTIAL SALES FOR A STORE

SITE
• Three approaches for using information about
the trade area to estimate the potential sales
for a store at the location are
(1) the Huff gravity model
(2) Regression analysis
(3) The analog method
 Numerical
A small town has two communities, Rock Creek and Oak
Hammock. The town currently has one 5,000-square-
foot drugstore with annual sales of $8 million, $3 million
of which come from Oak Hammock residents and $5
million from Rock Creek residents. A competitive chain is
considering opening a 10,000-square-foot store.
The driving time for the average Rock Creek resident to the
existing store is 10 minutes, but it would be only five
minutes to the new store. In contrast, the driving time
for the typical Oak Hammock resident to the existing
drugstore is 5 minutes and would be 15 minutes to the
new store. Based on its past experience, the drugstore
chain has found that l equals 2 for its store locations.
Answer
 Question???
A leased department operator studies three
possible locations with 200, 300, and 500 total
square feet of store space allocated to men’s
cologne (by all retailers in the areas).
A group of potential customers lives 7 minutes
from the first location, 10 minutes from the
second, and 15 minutes from the third.
If 200 shoppers for men’s cologne live 7 minutes
from Location 1, how many will shop there.
 The operator estimates the effect of travel time to be 2.
Therefore, the probability of consumers’ shopping is 43.9 percent for Location 1,
32.2 percent for Location 2, and 23.9 percent for Location 3.

If 200 shoppers for men’s cologne live 7 minutes from Location 1, about 88 of them
will shop there.
• If a product is important, such as dressy watches,
consumers are less travel sensitive. A l of 1
• leads to these figures: Location 1, 31.1 percent;
Location 2, 32.6 percent; and Location 3,
• 36.3 percent (based on the space in the cologne
example). Location 3 would be popular for
• the watches due to assortment.
 Numerical
A drugstore is considering opening a new location at
shopping center A, with hopes of capturing sales from a new
neighborhood under construction. Two nearby shopping
centers, B and C, will provide competition. Using the
following information and the Huff gravity model, determine
the probability that residents of the new neighborhood will
shop at shopping center A:

(New Store Proposed)

Answer…
Question???
Store Location: More Superstore (Aditya Birla Retail) in Forum Mall, Bengaluru
gets customers from three localities
Approximate Floor Area:3460 Square feet. Assuming time taken by consumers as 5
minutes from kankapura road , 10 minutes from Koramangala and 15 minutes from
Ejipura. What is the probability of customers for buying Gillette Shaving Blade
from these 3 locations.

Taking λ =1 as the product is important for daily use.

Question:
Location: #1 Bharthi Plaza, 1st cross, Tavarekere Main Road,
Sadduguntepalya, Tavarekere, Bengaluru, Karnataka 560029
Approximate Floor Area:4320 sq. feet
Time taken to reach Village: Assuming time taken by consumers as 5 and
10 minutes what is the probability for customer to buy Sunscreen.