Hub network design problem with profit optimization for time-definite LTL freight transportation

Cheng-Chang Lin and Shwu-Chiou Lee

Transportation Research Part E: Logistics and Transportation Review, 2018, vol. 114, issue C, 104-120

Abstract: Time-definite less-than-truckload (LTL) carriers deliver small, time-guaranteed shipments for shippers. We analyze the hub network configuration under cost minimization and profit maximization behaviors. We extend a perfect inelasticity on demand with cost minimization to an elastic demand hub location design with profit maximization. We formulate this problem as a mixed-integer program that is solved using implicit enumeration with an embedded pricing subproblem. The computational results for a carrier’s operational network in Taiwan showed that different behaviors result in noticeably different pricing and demand distributions. In addition, profit optimization builds a denser hub network than cost minimization to increase profit.

Keywords: Hub network design; Hub median problem; Pricing; Hub-and-spoke network (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.tre.2018.03.007

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