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Profit Maximizing Hub Location Problems

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2018_Taherkhani_Alumur_OMEGA.pdf (2.58 MB)

Date

2019-07-01

Authors

Taherkhani, Gita
Alumur, Sibel A.

Journal Title

Journal ISSN

Volume Title

Publisher

Elsevier

Abstract

In this paper, we study profit maximizing hub location problems. We formulate mathematical models determining the location of hubs, designing the hub networks, and routing the demand in order to maximize profit. The profit is calculated by summing the total revenue minus total cost. Total cost includes the total transportation cost, the installation cost of hubs, and the cost of operating hub links. We consider all possible allocation strategies: multiple allocation, single allocation, and r-allocation. As an extension, for each allocation strategy, we also model the cases in which direct connections between non-hub nodes are allowed. To test and evaluate the performances of the proposed models, we use two well-known data sets from the literature. We analyze the resulting hub networks under various different parameter settings.

Description

The final publication is available at Elsevier via https://doi.org/10.1016/j.omega.2018.05.016 © 2018. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

hub location, hub network design, profit maximization

LC Keywords

Citation

URI

https://doi.org/10.1016/j.omega.2018.05.016
 http://hdl.handle.net/10012/14661

Collections

Waterloo Research
Management Sciences