Freight network design with heterogeneous values of time

Abstract

Abstract This paper aims to demonstrate the effect of recognizing heterogeneity in values of time on the design of a hub network for freight transportation. By taking the VOT distribution into account, we emphasize shippers’ broader logistical, social and economic situation in the network design, and are not limited to commodity types. The paper employs the single allocation p-hub median problem which minimizes the total generalized transportation cost (time, distance, etc.) with given demands. VOT is assumed to be discretely distributed, and estimated by mean-dispersion model and Latent Class model, based on a Stated Preference survey conducted in China, investigating railway shippers’ choice behavior of railway services. A local railway network with 14 nodes and 20 linkages is applied to discuss the effect of VOT distribution on multiple (i.e., 3) hub location strategy. Simulated Annealing (SA) is designed to solve the single allocation p-hub median problems. The numerical results shows that the VOT and its distribution should be taken into account for better simulating railway shippers’ heterogeneous valuations of service time versus time.