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Hub network design problem with profit optimization for time-definite LTL freight transportation

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  • Lin, Cheng-Chang
  • Lee, Shwu-Chiou

Abstract

Time-definite less-than-truckload (LTL) carriers deliver small, time-guaranteed shipments for shippers. We analyze the hub network configuration under cost minimization and profit maximization behaviors. We extend a perfect inelasticity on demand with cost minimization to an elastic demand hub location design with profit maximization. We formulate this problem as a mixed-integer program that is solved using implicit enumeration with an embedded pricing subproblem. The computational results for a carrier’s operational network in Taiwan showed that different behaviors result in noticeably different pricing and demand distributions. In addition, profit optimization builds a denser hub network than cost minimization to increase profit.

Suggested Citation

  • Lin, Cheng-Chang & Lee, Shwu-Chiou, 2018. "Hub network design problem with profit optimization for time-definite LTL freight transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 104-120.
    • Handle: RePEc:eee:transe:v:114:y:2018:i:c:p:104-120
    DOI: 10.1016/j.tre.2018.03.007
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    References listed on IDEAS

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    2. Kulkarni, Onkar & Dahan, Mathieu & Montreuil, Benoit, 2022. "Resilient Hyperconnected Parcel Delivery Network Design Under Disruption Risks," International Journal of Production Economics, Elsevier, vol. 251(C).
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    4. Jian Zhou & Kexin Xu & Yuxiu Zhao & Haoran Zheng & Zhengnan Dong, 2021. "Hub-and-Spoke Logistics Network Considering Pricing and Co-Opetition," Sustainability, MDPI, vol. 13(17), pages 1-21, September.

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