Profit maximization in congested hub location problems: Demand models and service level constraints

Ata Jalili Marand and Pooya Hoseinpour

Transportation Research Part E: Logistics and Transportation Review, 2025, vol. 195, issue C

Abstract: This study investigates a congested hub location problem with the aim of optimizing a service provider’s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider’s profitability.

Keywords: Hub location problem; Congestion; Pricing; Queuing; Mixed integer second-order cone programming (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.tre.2025.103995

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