Multi-period single-allocation hub location-routing: Models and heuristic solutions

Abstract

This work investigates the use of time-dependent decisions in the context of hub-location routing. Instead of setting up the entire system at once, a planning horizon partitioned into several periods is considered during which the system is to be phased-in. In addition to installing the hubs, decisions are also to be made concerning the hub-level network, namely, the hub edges to use. The origin-destination flows are assumed to be time-dependent as well as the costs underlying the problem which include, set up costs for hubs and hub edges and variable operational costs at the hubs. A mathematical model is developed for the problem that can be solved up to proven optimality with a general-purpose solver for small instances of the problem. For larger instances, a four-phase matheuristic that combines principles of relax-and-fix, variable neighborhood descent and local branching schemes is proposed. In addition, two variants of the matheuristic have been developed. The above model and methodology are tested using data generated by extending existing hub location instances to our problem. The obtained results are detailed and analyzed in depth. The major conclusion is that by capturing time in the decision-making process, one may find solutions that better hedge against parameter changes throughout time. Furthermore, the overall procedure presented in this work is quite general in the sense that it can be easily adapted to other multi-period decision making problems and different objective functions.