IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v32y1998i8p605-616.html
   My bibliography  Save this article

Hub location with flow economies of scale

Author

Listed:
  • O'Kelly, M. E.
  • Bryan, D. L.

Abstract

A characteristic feature of hub and spoke networks is the bundling of flows on the interhub links. This agglomeration of flows leads to reduced travel costs across the interhub links. Current models of hub location do not adequately model the scale economies of flow that accrue due to the agglomeration of flows. This paper shows that current hub location models, by assuming flow-independent costs, not only miscalculate total network cost, but may also erroneously select optimal hub locations and allocations. The model presented in this paper more explicitly models the scale economies that are generated on the interhub links and in doing so provides a more reliable model representation of the reality of hub and spoke networks.

Suggested Citation

  • O'Kelly, M. E. & Bryan, D. L., 1998. "Hub location with flow economies of scale," Transportation Research Part B: Methodological, Elsevier, vol. 32(8), pages 605-616, November.
    • Handle: RePEc:eee:transb:v:32:y:1998:i:8:p:605-616
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191-2615(98)00021-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Willard I. Zangwill, 1968. "Minimum Concave Cost Flows in Certain Networks," Management Science, INFORMS, vol. 14(7), pages 429-450, March.
    2. 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.
    3. Hall, Randolph W., 1987. "Direct versus terminal freight routing on a network with concave costs," Transportation Research Part B: Methodological, Elsevier, vol. 21(4), pages 287-298, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sun, Zhuo & Zheng, Jianfeng, 2016. "Finding potential hub locations for liner shipping," Transportation Research Part B: Methodological, Elsevier, vol. 93(PB), pages 750-761.
    2. Jenn-Rong Lin & Linda Nozick & Mark Turnquist, 2006. "Strategic design of distribution systems with economies of scale in transportation," Annals of Operations Research, Springer, vol. 144(1), pages 161-180, April.
    3. Sophie D. Lapierre & Angel B. Ruiz & Patrick Soriano, 2004. "Designing Distribution Networks: Formulations and Solution Heuristic," Transportation Science, INFORMS, vol. 38(2), pages 174-187, May.
    4. 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.
    5. Canovas, Lazaro & Garcia, Sergio & Marin, Alfredo, 2007. "Solving the uncapacitated multiple allocation hub location problem by means of a dual-ascent technique," European Journal of Operational Research, Elsevier, vol. 179(3), pages 990-1007, June.
    6. James F. Campbell & Morton E. O'Kelly, 2012. "Twenty-Five Years of Hub Location Research," Transportation Science, INFORMS, vol. 46(2), pages 153-169, May.
    7. Dhyani, Sneha & Jayaswal, Sachin & Sinha, Ankur & Vidyarthi, Navneet, 2019. "Alternate Second Order Conic Programming Reformulations for Hub Location with Capacity Selection under Demand," IIMA Working Papers WP 2018-12-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Elisangela Martins de Sá & Ivan Contreras & Jean-François Cordeau & Ricardo Saraiva de Camargo & Gilberto de Miranda, 2015. "The Hub Line Location Problem," Transportation Science, INFORMS, vol. 49(3), pages 500-518, August.
    9. He, Yan & Wu, Tao & Zhang, Canrong & Liang, Zhe, 2015. "An improved MIP heuristic for the intermodal hub location problem," Omega, Elsevier, vol. 57(PB), pages 203-211.
    10. Harmsen - van Hout, Marjolein J.W. & Herings, P. Jean-Jacques & Dellaert, Benedict G.C., 2013. "Communication network formation with link specificity and value transferability," European Journal of Operational Research, Elsevier, vol. 229(1), pages 199-211.
    11. Alumur, Sibel A. & Yaman, Hande & Kara, Bahar Y., 2012. "Hierarchical multimodal hub location problem with time-definite deliveries," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(6), pages 1107-1120.
    12. C S Sung & S H Song, 2003. "Integrated service network design for a cross-docking supply chain network," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(12), pages 1283-1295, December.
    13. A. T. Ernst & M. Krishnamoorthy, 1998. "An Exact Solution Approach Based on Shortest-Paths for p -Hub Median Problems," INFORMS Journal on Computing, INFORMS, vol. 10(2), pages 149-162, May.
    14. Pardis Pourmohammadi & Reza Tavakkoli-Moghaddam & Yaser Rahimi & Chefi Triki, 2023. "Solving a hub location-routing problem with a queue system under social responsibility by a fuzzy meta-heuristic algorithm," Annals of Operations Research, Springer, vol. 324(1), pages 1099-1128, May.
    15. Tiwari, Richa & Jayaswal, Sachin & Sinha, Ankur, 2021. "Alternate solution approaches for competitive hub location problems," European Journal of Operational Research, Elsevier, vol. 290(1), pages 68-80.
    16. Shiono, Naoshi & Suzuki, Hisatoshi & Saruwatari, Yasufumi, 2019. "A dynamic programming approach for the pipe network layout problem," European Journal of Operational Research, Elsevier, vol. 277(1), pages 52-61.
    17. Ricardo Saraiva de Camargo & Gilberto de Miranda & Henrique Pacca L. Luna, 2009. "Benders Decomposition for Hub Location Problems with Economies of Scale," Transportation Science, INFORMS, vol. 43(1), pages 86-97, February.
    18. Cortés, Pablo & Muñuzuri, Jesús & Guadix, José & Onieva, Luis, 2013. "Optimal algorithm for the demand routing problem in multicommodity flow distribution networks with diversification constraints and concave costs," International Journal of Production Economics, Elsevier, vol. 146(1), pages 313-324.
    19. Hark‐Chin Hwang & Wilco van den Heuvel, 2012. "Improved algorithms for a lot‐sizing problem with inventory bounds and backlogging," Naval Research Logistics (NRL), John Wiley & Sons, vol. 59(3‐4), pages 244-253, April.
    20. Karla E. Bourland & Candace Arai Yano, 1996. "Lot sizing when yields increase during the production run," Naval Research Logistics (NRL), John Wiley & Sons, vol. 43(8), pages 1035-1047, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:32:y:1998:i:8:p:605-616. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.