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Location of hubs in a competitive environment

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  • Vladimir Marianov
  • Daniel Serra

    ()

  • Charles Revelle

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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File URL: http://www.econ.upf.edu/docs/papers/downloads/227.pdf
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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 227.

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Date of creation: Jun 1997
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Handle: RePEc:upf:upfgen:227

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Web page: http://www.econ.upf.edu/

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Keywords: Location; hub; tabu search;

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References

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  1. Campbell, James F., 1994. "Integer programming formulations of discrete hub location problems," European Journal of Operational Research, Elsevier, vol. 72(2), pages 387-405, January.
  2. Skorin-Kapov, Darko & Skorin-Kapov, Jadranka & O'Kelly, Morton, 1996. "Tight linear programming relaxations of uncapacitated p-hub median problems," European Journal of Operational Research, Elsevier, vol. 94(3), pages 582-593, November.
  3. O'kelly, Morton E., 1987. "A quadratic integer program for the location of interacting hub facilities," European Journal of Operational Research, Elsevier, vol. 32(3), pages 393-404, December.
  4. Skorin-Kapov, Darko & Skorin-Kapov, Jadranka, 1994. "On tabu search for the location of interacting hub facilities," European Journal of Operational Research, Elsevier, vol. 73(3), pages 502-509, March.
  5. P J Densham & G Rushton, 1992. "Strategies for solving large location-allocation problems by heuristic methods," Environment and Planning A, Pion Ltd, London, vol. 24(2), pages 289-304, February.
  6. Klincewicz, J. G., 1991. "Heuristics for the p-hub location problem," European Journal of Operational Research, Elsevier, vol. 53(1), pages 25-37, July.
  7. Aykin, Turgut, 1995. "The hub location and routing problem," European Journal of Operational Research, Elsevier, vol. 83(1), pages 200-219, May.
  8. Campbell, James F., 1993. "Continuous and discrete demand hub location problems," Transportation Research Part B: Methodological, Elsevier, vol. 27(6), pages 473-482, December.
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Citations

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Cited by:
  1. Adler, Nicole & Berechman, Joseph, 2001. "Evaluating optimal multi-hub networks in a deregulated aviation market with an application to Western Europe," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(5), pages 373-390, June.
  2. Vladimir Marianov & Daniel Serra, 2000. "Location models for airline hubs behaving as M/D/c queues," Economics Working Papers 453, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Adler, Nicole, 2001. "Competition in a deregulated air transportation market," European Journal of Operational Research, Elsevier, vol. 129(2), pages 337-345, March.
  4. Adler, Nicole & Smilowitz, Karen, 2007. "Hub-and-spoke network alliances and mergers: Price-location competition in the airline industry," Transportation Research Part B: Methodological, Elsevier, vol. 41(4), pages 394-409, May.
  5. Aros-Vera, Felipe & Marianov, Vladimir & Mitchell, John E., 2013. "p-Hub approach for the optimal park-and-ride facility location problem," European Journal of Operational Research, Elsevier, vol. 226(2), pages 277-285.
  6. Daniel Serra, 2003. "Location of multiple server common service centers or public facilities for minimizing general congestion and travel cost functions," Economics Working Papers 658, Department of Economics and Business, Universitat Pompeu Fabra.

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