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Hub Facility Location With Fixed Costs

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  • Morton E. O'Kelly

Abstract

ABSTRACT In the p‐hub location model, it is usual to ignore the fixed costs of opening facilities. In contrast, the simple plant location problem includes fixed facility costs and thereby makes the number of facilities one of the decision variables. This paper introduces fixed facility costs into a hub location model, thereby making the number of hubs a decision variable. As an initial effort toward solving the hub model with fixed costs, a two‐step procedure is devised. Step 1 involves an estimate of a good upper bound on the solution, using heuristics. Step 2 involves the computation of a tight lower bound on the solution; as a by‐product, an improvement of the best solution from Step 1 may be found. Computational results are discussed for sample problems.

Suggested Citation

  • Morton E. O'Kelly, 1992. "Hub Facility Location With Fixed Costs," Papers in Regional Science, Wiley Blackwell, vol. 71(3), pages 293-306, July.
    • Handle: RePEc:bla:presci:v:71:y:1992:i:3:p:293-306
    DOI: 10.1111/j.1435-5597.1992.tb01848.x
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    Cited by:

    1. Marianov, Vladimir & Serra, Daniel & ReVelle, Charles, 1999. "Location of hubs in a competitive environment," European Journal of Operational Research, Elsevier, vol. 114(2), pages 363-371, April.
    2. Ajagekar, Akshay & You, Fengqi, 2019. "Quantum computing for energy systems optimization: Challenges and opportunities," Energy, Elsevier, vol. 179(C), pages 76-89.
    3. Sun, Zhuo & Zheng, Jianfeng, 2016. "Finding potential hub locations for liner shipping," Transportation Research Part B: Methodological, Elsevier, vol. 93(PB), pages 750-761.
    4. Abdinnour-Helm, Sue, 1998. "A hybrid heuristic for the uncapacitated hub location problem," European Journal of Operational Research, Elsevier, vol. 106(2-3), pages 489-499, April.
    5. Ebery, Jamie & Krishnamoorthy, Mohan & Ernst, Andreas & Boland, Natashia, 2000. "The capacitated multiple allocation hub location problem: Formulations and algorithms," European Journal of Operational Research, Elsevier, vol. 120(3), pages 614-631, February.
    6. Teye, Collins & Bell, Michael G H & Bliemer, Michiel C J, 2017. "Urban intermodal terminals: The entropy maximising facility location problem," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 64-81.
    7. Zhou, Yueer & Li, Linbo & Zhang, Yahua, 2023. "Location of transit-oriented development stations based on multimodal network equilibrium: Bi-level programming and paradoxes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 174(C).
    8. Ebery, Jamie, 2001. "Solving large single allocation p-hub problems with two or three hubs," European Journal of Operational Research, Elsevier, vol. 128(2), pages 447-458, January.
    9. Yuan, Yun & Yu, Jie, 2018. "Locating transit hubs in a multi-modal transportation network: A cluster-based optimization approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 85-103.

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