Capacitated Multiple Allocation Hub Covering Flow Problem

Abstract

The aim of the Capacitated Multiple Allocation Hub Covering Flow Problem is to find theoptimal design for hub-and-spoke networks while taking into account hub opening and demandrouting costs. Every network node has the potential to be a hub and demand from an origin to adestination must be sent through at least one hub. The network is incomplete in the sense thatthe maximum allowed or coverage distance between any opened hub and demand origin/destination is predefined. It is assumed that there is a cost saving to route demand via hubs dueto consolidation. Another important issue is the consideration of capacity restrictions imposedon network links and opened hubs. The problem is developed as a mixed-integer linearoptimization problem. According to the results obtained from computational experiments, weshow that taking into account both flow related costs and capacities of network componentsconcurrently is very important to have a cost effective design.

Keywords

• facility location
• network design
• hub-and-spokenetworks
• capacitatedhub covering
• multipleallocation