Spatial analysis of single allocation hub location problems

Date
2016
Authors
Peker, M.
Kara, B. Y.
Campbell, J. F.
Alumur, S. A.
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Source Title
Networks and Spatial Economics
Print ISSN
1566-113X
Electronic ISSN
1572-9427
Publisher
Springer
Volume
16
Issue
4
Pages
1075 - 1101
Language
English
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Abstract

Hubs are special facilities that serve as switching, transshipment and sorting nodes in many-to-many distribution systems. Flow is consolidated at hubs to exploit economies of scale and to reduce transportation costs between hubs. In this article, we first identify general features of optimal hub locations for single allocation hub location problems based on only the fundamental problem data (demand for travel and spatial locations). We then exploit this knowledge to develop a straightforward heuristic methodology based on spatial proximity of nodes, dispersion and measures of node importance to delineate subsets of nodes likely to contain optimal hubs. We then develop constraints for these subsets for use in mathematical programming formulations to solve hub location problems. Our methodology can also help narrow an organization’s focus to concentrate on more detailed and qualitative analyses of promising potential hub locations. Results document the value of including both demand magnitude and centrality in measuring node importance and the relevant tradeoffs in solution quality and time.

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