An Optimal Design for the Capacitated Hub Location Problem with Asymmetric Allocation

Abstract

Hub and Spoke (H&S) network reflecting the scale economies through consolidation and a large amount of freight transportation is widely used to reduce total transportation costs. H&S network has transportation routes that go to the final delivery point pass through hub linking destination from hub linking origin. In this paper we present a 0-1 integer programming model and a solution method for the capacitated asymmetric allocation hub location problem (CAAHLP). We determine the number of hubs, the locations of hubs, and asymmetric allocation of non-hub nodes to hub with the objective of minimum total transportation costs satisfying the required service level. As the CAAHLP has impractically demanding for the large sized problem, we develop a solution method based on ant colony optimization algorithm. We investigate performance of the proposed solution method through the comparative study. The experimental results show that the newly proposed asymmetrically allocated network can provide better solution than the singly allocated network in terms of cost and service level.