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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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    1. Campbell, James F., 1993. "Continuous and discrete demand hub location problems," Transportation Research Part B: Methodological, Elsevier, vol. 27(6), pages 473-482, December.
    2. Aykin, Turgut, 1995. "The hub location and routing problem," European Journal of Operational Research, Elsevier, vol. 83(1), pages 200-219, May.
    3. 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.
    4. 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.
    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. 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.
    7. 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.
    8. Klincewicz, J. G., 1991. "Heuristics for the p-hub location problem," European Journal of Operational Research, Elsevier, vol. 53(1), pages 25-37, July.
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    Citations

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    Cited by:

    1. Julia Sender & Thomas Siwczyk & Petra Mutzel & Uwe Clausen, 0. "Matheuristics for optimizing the network in German wagonload traffic," EURO Journal on Computational Optimization, Springer;EURO - The Association of European Operational Research Societies, vol. 0, pages 1-26.
    2. repec:spr:annopr:v:256:y:2017:i:1:d:10.1007_s10479-016-2288-z is not listed on IDEAS
    3. 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.
    4. 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.
    5. 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.
    6. Adler, Nicole, 2001. "Competition in a deregulated air transportation market," European Journal of Operational Research, Elsevier, vol. 129(2), pages 337-345, March.
    7. Kratica, Jozef & Stanimirovic, Zorica & Tosic, Dusan & Filipovic, Vladimir, 2007. "Two genetic algorithms for solving the uncapacitated single allocation p-hub median problem," European Journal of Operational Research, Elsevier, vol. 182(1), pages 15-28, October.
    8. Alibeyg, Armaghan & Contreras, Ivan & Fernández, Elena, 2016. "Hub network design problems with profits," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 96(C), pages 40-59.
    9. repec:eee:jaitra:v:68:y:2018:i:c:p:118-136 is not listed on IDEAS
    10. J. F. Campbell & A. T. Ernst & M. Krishnamoorthy, 2005. "Hub Arc Location Problems: Part I---Introduction and Results," Management Science, INFORMS, vol. 51(10), pages 1540-1555, October.
    11. repec:spr:eurjco:v:5:y:2017:i:3:d:10.1007_s13675-016-0076-9 is not listed on IDEAS
    12. repec:eee:ejores:v:266:y:2018:i:1:p:57-71 is not listed on IDEAS
    13. Wagner, Bernd, 2008. "A note on "Location of hubs in a competitive environment"," European Journal of Operational Research, Elsevier, vol. 184(1), pages 57-62, January.
    14. repec:eee:transb:v:100:y:2017:i:c:p:64-81 is not listed on IDEAS
    15. 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.
    16. Lüer-Villagra, Armin & Marianov, Vladimir, 2013. "A competitive hub location and pricing problem," European Journal of Operational Research, Elsevier, vol. 231(3), pages 734-744.
    17. Mahmutogullari, Ali Irfan & Kara, Bahar Y., 2016. "Hub location under competition," European Journal of Operational Research, Elsevier, vol. 250(1), pages 214-225.
    18. 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.
    19. Teye, Collins & Bell, Michael G.H. & Bliemer, Michiel C.J., 2017. "Entropy maximising facility location model for port city intermodal terminals," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 100(C), pages 1-16.

    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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