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Profit maximization in congested hub location problems: Demand models and service level constraints

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  • Jalili Marand, Ata
  • Hoseinpour, Pooya

Abstract

This study investigates a congested hub location problem with the aim of optimizing a service provider’s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider’s profitability.

Suggested Citation

  • Jalili Marand, Ata & Hoseinpour, Pooya, 2025. "Profit maximization in congested hub location problems: Demand models and service level constraints," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:transe:v:195:y:2025:i:c:s1366554525000365
    DOI: 10.1016/j.tre.2025.103995
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