Abstract
The hub location and revenue management problems are two interesting research fields in the transportation and network design studies. The hub location model designs the transportation network structure and the revenue management model allocates the network’s capacity for customer classes based on their sensitivity to prices. In this paper, we consider the integrated hub location and revenue management problem in the airline industry to maximize the revenue of transportation network and minimize hub installation costs. p hubs have been chosen from a set of n nodes and connected to a central node based on star–star network design. The capacity of the installed links between the hubs and the central node and the hubs and non-hub nodes is limited. This limited capacity has been allocated to the stochastic demands of customer classes using the revenue management approach. A two-stage stochastic model has been derived to determine the locations of hubs and protection levels in the ticket sale process, and an efficient modification of genetic algorithm has been proposed for the large-scale problems. Numerical experiments have been carried out to assess the effectiveness of the proposed algorithm.
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