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      • Department of Industrial Engineering
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      Hub location under competition

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      Author(s)
      Mahmutogullari, A. I.
      Kara, B. Y.
      Date
      2016
      Source Title
      European Journal of Operational Research
      Print ISSN
      0377-2217
      Electronic ISSN
      1872-6860
      Publisher
      Elsevier
      Volume
      250
      Issue
      1
      Pages
      214 - 225
      Language
      English
      Type
      Article
      Item Usage Stats
      219
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      914
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      Abstract
      Hubs are consolidation and dissemination points in many-to-many flow networks. Hub location problem is to locate hubs among available nodes and allocate non-hub nodes to these hubs. The mainstream hub location studies focus on optimal decisions of one decision-maker with respect to some objective(s) even though the markets that benefit hubbing are oligopolies. Therefore, in this paper, we propose a competitive hub location problem where the market is assumed to be a duopoly. Two decision-makers (or firms) sequentially decide locations of their hubs and then customers choose one firm with respect to provided service levels. Each decision-maker aims to maximize his/her own market share. We propose two problems for the leader (former decision-maker) and follower (latter decision-maker): (r|Xp)hub − medianoid and (r|p)hub − centroid problems, respectively. Both problems are proven to be NP-complete. Linear programming models are presented for these problems as well as exact solution algorithms for the (r|p)hub − centroid problem. The performance of models and algorithms are tested by computational analysis conducted on CAB and TR data sets.
      Keywords
      Competition models
      Competitive location
      Hub location
      Commerce
      Competition
      Linear programming
      Location
      Hub location
      Hub location problems
      Linear programming models
      Models and algorithms
      Optimal decisions
      Decision making
      Permalink
      http://hdl.handle.net/11693/36844
      Published Version (Please cite this version)
      http://dx.doi.org/10.1016/j.ejor.2015.09.008
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      • Department of Industrial Engineering 758
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