The stochastic multi-modal hub location problem with direct link strategy and multiple capacity levels for cargo delivery systems

Abstract

This paper introduces the stochastic multi-modal hub location problem with direct link strategy and multiple capacity levels for cargo delivery systems under demand uncertainty. For capturing the uncertain nature of demand, we present a stochastic optimization model to formulate this problem formally via the expected value and the chance-constrained programming techniques. Under some mild assumptions, we propose a computationally tractable approach to turn the original model into a crisp equivalent integer second-order cone programming model, which can be efficiently solved by CPLEX for only small instances. Hence, we design a memetic algorithm incorporating genetic search and local intensification for realistic size instances. Furthermore, we provide extended analyses of the original model by considering the mode-specific hub and incorporating the fixed transportation cost. To demonstrate the superiority of the proposed model and the effectiveness of the solution approach, we conduct a series of computational experiments based on Turkish network data set.