Designing a network of service centers involves a tradeoff between the revenue likely to be generated by providing a high level of service and the cost of operating the service network. The authors develop a procedure for determining the location and design strategies for new services using a modified maximal covering location-allocation model. The network optimization procedure relies on direct assessment of consumer sensitivity to distance and nondistance factors through conjoint analysis and simultaneously determines the network size, location of outlets, price, and operating characteristics.
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