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Location of hubs in a competitive environment

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  • Marianov, Vladimir
  • Serra, Daniel
  • ReVelle, Charles

Abstract

We offer a formulation that locates hubs on a network in a competitive environment; that is, customer capture is sought, which happens whenever the location of a new hub results in a reduction of the current cost (time, distance) needed by the traffic that goes from the specified origin to the specified destination. The formulation presented here reduces the number of variables and constraints as compared to existing covering models. This model is suited for both air passenger and cargo transportation. In this model, each origin-destination flow can go through either one or two hubs, and each demand point can be assigned to more than a hub, depending on the different destinations of its traffic. Links (``spokes'' have no capacity limit. Computational experience is provided.
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Suggested Citation

  • Marianov, Vladimir & Serra, Daniel & ReVelle, Charles, 1999. "Location of hubs in a competitive environment," European Journal of Operational Research, Elsevier, vol. 114(2), pages 363-371, April.
    • Handle: RePEc:eee:ejores:v:114:y:1999:i:2:p:363-371
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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