Multiple Allocation Hub Location Model with Fixed Arc Costs

This article formulates a model to analyze the role of fixed costs in the design of optimal transportation hub networks. The primary purpose of this article is to better model costs in hub networks, an issue that has attracted considerable attention. This article allows particular versions of hub networks to emerge from the cost structure, rather than by imposing a rigid predefined connectivity protocol. The article integrates modeling approaches from an environmental hub location model with the three-index formulation of Ernst and Krishnamoorthy to produce a hub location model with fixed and variable costs for all arcs. Our goal is to demonstrate how the inclusion of a richer cost model in transportation hub location can generate a wide range of different network types, depending on the relative magnitudes of the cost elements. While the existence of special case network solutions is well known and has been exploited in optimization, the current research provides added insight to the cost of flow in a more, or less, connected hub network. Eight fundamental prototype networks are derived as special cases, and some additional unanticipated network types also emerge. The results are illustrated with a standard CAB25 data set.

[1]  James F. Campbell Modeling Economies of Scale in Transportation Hub Networks , 2013, 2013 46th Hawaii International Conference on System Sciences.

[2]  Gang Yu,et al.  AIRLINE NETWORK DESIGN AND HUB LOCATION PROBLEMS , 1996 .

[3]  Thomas L. Magnanti,et al.  Modeling and Solving the Two-Facility Capacitated Network Loading Problem , 1995, Oper. Res..

[4]  Iván A. Contreras,et al.  General network design: A unified view of combined location and network design problems , 2012, Eur. J. Oper. Res..

[5]  Sibel A. Alumur,et al.  The design of single allocation incomplete hub networks , 2009 .

[6]  Ting L. Lei Identifying Critical Facilities in Hub‐and‐Spoke Networks: A Hub Interdiction Median Problem , 2013 .

[7]  Nicole Adler,et al.  Aircraft trip cost parameters: A function of stage length and seat capacity , 2006 .

[8]  Hande Yaman,et al.  Star p-hub median problem with modular arc capacities , 2008, Comput. Oper. Res..

[9]  Cherie Lu,et al.  The environmental cost implication of hub-hub versus hub by-pass flight networks , 2007 .

[10]  John Black,et al.  HUB-AND-SPOKE NETWORKS AND THE INCLUSION OF ENVIRONMENTAL COSTS ON AIRPORT PRICING , 1998 .

[11]  James F. Campbell,et al.  Integer programming formulations of discrete hub location problems , 1994 .

[12]  Andreas T. Ernst,et al.  Hub Arc Location Problems: Part I - Introduction and Results , 2005, Manag. Sci..

[13]  Morton E. O'Kelly,et al.  Twenty-Five Years of Hub Location Research , 2012, Transp. Sci..

[14]  D. Bryan Extensions to the Hub Location Problem: Formulations and Numerical Examples , 2010 .

[15]  Andreas T. Ernst,et al.  Hub Arc Location Problems: Part II - Formulations and Optimal Algorithms , 2005, Manag. Sci..

[16]  Gilbert Laporte,et al.  Benders Decomposition for Large-Scale Uncapacitated Hub Location , 2011, Oper. Res..

[17]  Aisling J. Reynolds-Feighan,et al.  The Impact of U.S. Airline Deregulation on Airport Traffic Patterns , 2010 .

[18]  Morton E. O'Kelly,et al.  Fuel burn and environmental implications of airline hub networks , 2012 .

[19]  Francisco Saldanha-da-Gama,et al.  Discretized formulations for capacitated location problems with modular distribution costs , 2010, Eur. J. Oper. Res..

[20]  Iván A. Contreras,et al.  The Tree of Hubs Location Problem , 2010, Eur. J. Oper. Res..

[21]  Harvey J. Miller,et al.  THE HUB NETWORK DESIGN PROBLEM: A REVIEW AND SYNTHESIS. , 1994 .

[22]  Nicole Adler,et al.  Hub-and-spoke network alliances and mergers: Price-location competition in the airline industry , 2007 .

[23]  Alf Kimms,et al.  Economies of Scale in Hub & Spoke Network Design Models: We Have It All Wrong. , 2006 .

[24]  Ricardo Saraiva de Camargo,et al.  Benders Decomposition for Hub Location Problems with Economies of Scale , 2009, Transp. Sci..

[25]  Andreas T. Ernst,et al.  Efficient algorithms for the uncapac-itated single allocation p-hub median problem , 1996 .

[26]  Sibel A. Alumur,et al.  Network hub location problems: The state of the art , 2008, Eur. J. Oper. Res..

[27]  Thomas L. Magnanti,et al.  Network Design and Transportation Planning: Models and Algorithms , 1984, Transp. Sci..

[28]  Mercedes Landete,et al.  New formulations for the uncapacitated multiple allocation hub location problem , 2006, Eur. J. Oper. Res..

[29]  James F. Campbell Designing Hub Networks with Connected and Isolated Hubs , 2010, 2010 43rd Hawaii International Conference on System Sciences.

[30]  Hande Yaman,et al.  Allocation strategies in hub networks , 2011, Eur. J. Oper. Res..

[31]  Hande Yaman,et al.  Solving the hub location problem with modular link capacities , 2005, Comput. Oper. Res..

[32]  M. O'Kelly,et al.  Mode Choice in a Hub-and-Spoke Network: A Zero-One Linear Programming Approach , 2010 .

[33]  M. O'Kelly,et al.  Activity Levels at Hub Facilities in Interacting Networks , 2010 .

[34]  Hyun Kim,et al.  Reliable P-Hub Location Problems in Telecommunication Networks , 2009 .