From the point of view of the system of supply and demand network,a competitive facility location model was built aiming at the objective of minimum loss of the system by introducing a utility function.The model improves the limitations of the existing models,which aim at maximizing the utility of the new facilities.Compared with traditional methods,this optimization target reduces the vicious competition between individuals,and reflects the concept of win win cooperation better.The problem of competitive facility location is an NP difficult problem.Therefore an effective scatter search heuristic algorithm was devised according to the model characteristics,and the detailed implementation steps were given.By calculating and programming on a set of examples with the Lingo software and the scatter search algorithm programming,it can be concluded that the algorithm has a fast running speed and good convergence.