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Cost and Retail Gravitation Model Des Moine You are the owner of a very successful toy store in Des Moines, Iowa. You are contemplating the idea of expanding her business by opening another store in Cedar Rapids, Iowa. But when you researched the area, you learned that a thriving competitor carrying a line similar to her products operates a store in lowa City, 30 miles away. You are worried that you may have to share your new store's secondary and fringe trading areas which would respectively attract about 25 percent and 5 percent of her customers, with your competitor. In that case, you would lose some of these customers to your competitor because of its proximity. You remember that in your training session at the Chamber of Commerce, you learned how to calculate the breaking point between the city locations of your intended to ce and the competitor's store using Nelly's Breaking Point Model. This model will rmine the optimal location between the two cities. You bring out your marke at Dabd/TVPPwhere: Dan is the breaking po City B(lowa City) d' is the distance between cities Pa is the population of city Ace Po is the population of city Blowa City 1 Distance between Cits Population of CRYA Population of City Breaking Point from City A From Google data, you discover that the population of Cedar Rapids is 130.000 and that the population of lowa City is 12,000. You plug these numbers into the above worksheet. What is the distance from the breaking point to your intended store in Cedar Rapids? O 17 miles 11 miles 19 miles O 13 miles 2. You also consider another locality for your store, Cedar Falls, Iowa, which has a population of 40,000. Its twin city, Waterloo, has a population of 70,000. A major competitor has a toy store located at Crossroads Mall in the heart of Waterloo, 10 miles from the center of Cedar Falls, where you are planning to open your new store. You want to know the distance from the breaking point to your intended store in Cedar Falls. Using the same worksheet above, what did you find? -Terences 10 miles O 4 miles O 8 miles 06 miles 3. You work with a consultant who tells you that lowa City is projected to grow to 97.000 in the next decade. If that happens, what is the new distance from the breaking point to your intended store in Cedar Rapids? 16 miles O 19 miles 17 miles 1 miles Help Sau Chapter 11 Analytics the new distance from the areaking point to your intended store in Lecar Kapas: O 16 miles O 19 miles 17 miles O 14 miles 100 points 4. You also read a projection that Cedar Rapids is going to decline in size to 100.000 over the next decade. If that happens, and lowa City grows to 97,000 in that same time period, what would be the new distance from the breaking point to your store in Cedar Rapids? References DO 10 miles O 16 miles 15 miles O 17 miles 5. You are also concerned about a former co worker who opened a similar store in Dubuque, which has a population of 59,000 and is 72 miles away. You want to know the distance from the breaking point to your intended store in Cedar Rapids. Using the same worksheet above, what is the distance for the breaking point to her intended store in Cedar Rapids? O 8 miles O 41 miles O 22 miles 43 miles

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