Fish gotta swim. Birds gotta fly. And service companies gotta spread out; geographic expansion has been, and will continue to be, one of their primary means of growth. Adding new retail stores, sales branches, and service centers significantly increases customer access and can do the same for sales. But managing the result—a classic distributed service network with hundreds or even thousands of service and retail-customer touch points—can be surprisingly difficult, and the challenge becomes more complex the more the network grows.

Anyone who has managed such networks will recognize the varied and tough decisions they require. Consider a few typical ones:

• After a rival equipment-repair company announces a two-hour service guarantee, its business jumps. Your company serves its customers in about three hours. Should you do nothing, match your competitor’s offer, or try one-upmanship?
• You are the regional manager of a coffee chain deciding whether to add a tenth store in a given city or to branch out to a totally new one. How do you determine the acceptable level of cannibalization for your existing stores? Do you open the tenth one or enter the new city?
• Last year, some bank branches in your region easily hit their 8...