IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v114y2018icp104-120.html
   My bibliography  Save this article

Hub network design problem with profit optimization for time-definite LTL freight transportation

Author

Listed:
  • Lin, Cheng-Chang
  • Lee, Shwu-Chiou

Abstract

Time-definite less-than-truckload (LTL) carriers deliver small, time-guaranteed shipments for shippers. We analyze the hub network configuration under cost minimization and profit maximization behaviors. We extend a perfect inelasticity on demand with cost minimization to an elastic demand hub location design with profit maximization. We formulate this problem as a mixed-integer program that is solved using implicit enumeration with an embedded pricing subproblem. The computational results for a carrier’s operational network in Taiwan showed that different behaviors result in noticeably different pricing and demand distributions. In addition, profit optimization builds a denser hub network than cost minimization to increase profit.

Suggested Citation

  • Lin, Cheng-Chang & Lee, Shwu-Chiou, 2018. "Hub network design problem with profit optimization for time-definite LTL freight transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 104-120.
    • Handle: RePEc:eee:transe:v:114:y:2018:i:c:p:104-120
    DOI: 10.1016/j.tre.2018.03.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554517306208
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2018.03.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. Morton O’Kelly & Henrique Luna & Ricardo Camargo & Gilberto Miranda, 2015. "Hub Location Problems with Price Sensitive Demands," Networks and Spatial Economics, Springer, vol. 15(4), pages 917-945, December.
    2. 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.
    3. Contreras, Ivan & Fernández, Elena, 2012. "General network design: A unified view of combined location and network design problems," European Journal of Operational Research, Elsevier, vol. 219(3), pages 680-697.
    4. 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.
    5. 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.
    6. Ivan Contreras & Jean-François Cordeau & Gilbert Laporte, 2011. "Benders Decomposition for Large-Scale Uncapacitated Hub Location," Operations Research, INFORMS, vol. 59(6), pages 1477-1490, December.
    7. Moon-gil Yoon & Young-ho Baek & Dong-wan Tcha, 1998. "Design of a distributed fiber transport network with hubbing topology," European Journal of Operational Research, Elsevier, vol. 104(3), pages 510-520, February.
    8. 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.
    9. Lin, Cheng-Chang, 2001. "The freight routing problem of time-definite freight delivery common carriers," Transportation Research Part B: Methodological, Elsevier, vol. 35(6), pages 525-547, July.
    10. Lin, Cheng-Chang & Chen, Sheu-Hua, 2008. "An integral constrained generalized hub-and-spoke network design problem," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(6), pages 986-1003, November.
    11. Alumur, Sibel A. & Kara, Bahar Y. & Karasan, Oya E., 2009. "The design of single allocation incomplete hub networks," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 936-951, December.
    12. Lin, Cheng-Chang & Lin, Dung-Ying & Young, Melanie M., 2009. "Price planning for time-definite less-than-truckload freight services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 525-537, July.
    13. 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.
    14. Grunert, Tore & Sebastian, Hans-Jurgen, 2000. "Planning models for long-haul operations of postal and express shipment companies," European Journal of Operational Research, Elsevier, vol. 122(2), pages 289-309, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shima Taheri & Mohammad Tamannaei, 2023. "Integrated Multi-Level Intermodal Network Design Problem: A Sustainable Approach, Based on Competition of Rail and Road Transportation Systems," Networks and Spatial Economics, Springer, vol. 23(1), pages 1-37, March.
    2. Kulkarni, Onkar & Dahan, Mathieu & Montreuil, Benoit, 2022. "Resilient Hyperconnected Parcel Delivery Network Design Under Disruption Risks," International Journal of Production Economics, Elsevier, vol. 251(C).
    3. Rahmati, Reza & Neghabi, Hossein & Bashiri, Mahdi & Salari, Majid, 2023. "Stochastic regional-based profit-maximizing hub location problem: A sustainable overview," Omega, Elsevier, vol. 121(C).
    4. Jian Zhou & Kexin Xu & Yuxiu Zhao & Haoran Zheng & Zhengnan Dong, 2021. "Hub-and-Spoke Logistics Network Considering Pricing and Co-Opetition," Sustainability, MDPI, vol. 13(17), pages 1-21, September.

    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. Alumur, Sibel A. & Campbell, James F. & Contreras, Ivan & Kara, Bahar Y. & Marianov, Vladimir & O’Kelly, Morton E., 2021. "Perspectives on modeling hub location problems," European Journal of Operational Research, Elsevier, vol. 291(1), pages 1-17.
    2. Erdoğan, Güneş & Battarra, Maria & Rodríguez-Chía, Antonio M., 2022. "The hub location and pricing problem," European Journal of Operational Research, Elsevier, vol. 301(3), pages 1035-1047.
    3. Taherkhani, Gita & Alumur, Sibel A., 2019. "Profit maximizing hub location problems," Omega, Elsevier, vol. 86(C), pages 1-15.
    4. Ivan Contreras & Moayad Tanash & Navneet Vidyarthi, 2017. "Exact and heuristic approaches for the cycle hub location problem," Annals of Operations Research, Springer, vol. 258(2), pages 655-677, November.
    5. Alibeyg, Armaghan & Contreras, Ivan & Fernández, Elena, 2018. "Exact solution of hub network design problems with profits," European Journal of Operational Research, Elsevier, vol. 266(1), pages 57-71.
    6. Lin, Cheng-Chang & Lee, Shwu-Chiou, 2010. "The competition game on hub network design," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 618-629, May.
    7. Fernández, Elena & Sgalambro, Antonino, 2020. "On carriers collaboration in hub location problems," European Journal of Operational Research, Elsevier, vol. 283(2), pages 476-490.
    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. Camilo Ortiz-Astorquiza & Ivan Contreras & Gilbert Laporte, 2019. "An Exact Algorithm for Multilevel Uncapacitated Facility Location," Transportation Science, INFORMS, vol. 53(4), pages 1085-1106, July.
    10. 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.
    11. Zetina, Carlos Armando & Contreras, Ivan & Cordeau, Jean-François & Nikbakhsh, Ehsan, 2017. "Robust uncapacitated hub location," Transportation Research Part B: Methodological, Elsevier, vol. 106(C), pages 393-410.
    12. Neamatian Monemi, Rahimeh & Gelareh, Shahin & Nagih, Anass & Maculan, Nelson & Danach, Kassem, 2021. "Multi-period hub location problem with serial demands: A case study of humanitarian aids distribution in Lebanon," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    13. Ghaffarinasab, Nader & Kara, Bahar Y. & Campbell, James F., 2022. "The stratified p-hub center and p-hub maximal covering problems," Transportation Research Part B: Methodological, Elsevier, vol. 157(C), pages 120-148.
    14. Ivan Contreras & Elena Fernández, 2014. "Hub Location as the Minimization of a Supermodular Set Function," Operations Research, INFORMS, vol. 62(3), pages 557-570, June.
    15. Milad Keshvari Fard & Laurent Alfandari, 2018. "Trade-offs between the Stepwise Cost Function and its Linear Approximation for the Modular Hub Location Problem," Working Papers hal-01821280, HAL.
    16. Meuffels, W.J.M., 2015. "The design of road and air networks for express service providers," Other publications TiSEM d3266cb8-bc55-41be-adc7-4, Tilburg University, School of Economics and Management.
    17. Milad , Keshvari Fard & Laurent, Alfandari, 2018. "Trade-offs between the Stepwise Cost Function and its Linear Approximation for the Modular Hub Location Problem," ESSEC Working Papers WP1805, ESSEC Research Center, ESSEC Business School.
    18. Zhang, Haifeng & Yang, Kai & Gao, Yuan & Yang, Lixing, 2022. "Accelerating Benders decomposition for stochastic incomplete multimodal hub location problem in many-to-many transportation and distribution systems," International Journal of Production Economics, Elsevier, vol. 248(C).
    19. 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.
    20. 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.

    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:transe:v:114:y:2018:i:c:p:104-120. 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/600244/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.