Two Ice Cream Vendors

Problem definition

Consumers are randomly distributed along a let's say one mile long beach. They all like ice cream the same and dislike walking the same. Prices are regulated and equal for every vendor. There are only two vendors and each is on the other side of the beach. That means that both have almost same profit - half customers go to left side and half to right side. They decide to take customers from the other vendor by moving to another position.

Second extended option is with more than two vendors. There are up to five vendors and customers prefer one more thing - price. So agents try to find nearest and cheapest solution. Or let say some kind of compromise.

Method

For my purposes is the best simulating method NetLogo version 5.0.3. I decided to use this tool because I have some experience from earlier subject in school. This program is quite easy to use, user friendly, free and provides really decent service for this problem. Agents are moving randomly such as in reality people on real beach. They do not buy ice cream continuously but only under certain contition. Vendors in standard option have their default positions. In more than two vendors option they are distributed ramdomly on the beach and have different prices.

Model

Agents

There are two breeds of agents. Each has different role and behavior in the model:

• customers - randomly distributed. Maximum number of customers on beach is 500. They get hungry when they reach certain level of hunger which is influenced by moving. Every step increases hunger. In the moment hunger is over the limit, customer goes to buy ice cream. He tries to find the nearest shop. This is the only preference while the prices are equal.

In case there are more than two vendors, customer has to decide which vendor he pick. There are two factors which influences his way - distance and price. He is facing to the nearest but also wants low price. So if posible he pick the cheaper vendor. So in the model is not possible situation that only one vendor who has clients is the cheapest. All have visits but there are bigger differrences in visits then if price would be the same.

• vendors - in standard option with two vendors there are five default positions for them: 1. both on each side 2. one on side and second moved closer to the center 3. the one on the side moves on same spon as the second previous step 4. one move to center, other is on same spot 5. both are in center.

Main reason why they started moving from startind positions on side was vision of higher profit. The first one realized that when he move his shop closer to the center, he will take some customers from his competitor because people he left behind still have longer way to go elsewhere and customers he did not reached before now have one more option where to go buy ice cream so he has higher probability to gain more profit.