The Three-Hierarchical Location-Allocation of Banking Facilities with Risk and Uncertainty

The location‐allocation of commercial banking facilities often involves providing three layers of services (automatic teller machines, branch bank offices, and main banks) to non‐homogeneous population centers. As such, the bank location‐allocation problem is hierarchical in nature. Nevertheless, the existing literature to date has neglected to consider the internal dynamics and functional dependence of different hierarchies of banking services. To help the commercial banking organization formulate viable location‐allocation strategies in the ever‐uncertain and volatile banking industry, this paper proposes a stochastic, three‐hierarchical location‐allocation model for successively arranging the spatial patterns of banking facilities.