Release Time Scheduling and Hub Location for Next-Day Delivery

Inspired by a real-life problem faced by one of the largest ground-based cargo companies of Turkey, the current study introduces a new facet to the hub location literature. The release time scheduling and hub location problem aims to select a specified number of hubs from a fixed set of demand centers, to allocate each demand center to a hub, and to decide on the release times of trucks from each demand center in such a way that the total amount of cargo guaranteed to be delivered to every potential destination by the next day is not below a threshold and the total routing cost is minimized. The paper introduces integer programming models to solve this problem in the special cases when the cargo uniformly arrives to each demand center during the day and the more realistic pattern of when the cargo arrivals exhibit a piecewise linear form. Several classes of valid inequalities are proposed to strengthen the formulations. Extensions with multiple service levels and discrete sets for release times are also discussed. Computational results show the computational viability of the models under realistic scenarios as well as the validity of the proposed problems in answering several interesting questions from the cargo sector’s perspective.