Hub Location Problems with Price Sensitive Demands

Morton O’Kelly (), Henrique Luna (), Ricardo Camargo () and Gilberto Miranda ()

Networks and Spatial Economics, 2015, vol. 15, issue 4, 917-945

Abstract: This work addresses the hub location problem with price-sensitive demands. The article analyzes sensitivity of demand to quality of service in such systems, and enables the solution of large-scale instances. Two distinct working formulations are provided, and an improved Benders decomposition algorithm is deployed. Simulation of consumer choice between competing services is addressed in the computational experiments. Further, a specialized sub-problem solution procedure which is able to deliver good Benders cuts in reasonable time is developed. The results are illustrated with standard test data sets. The research contributes to a better understanding of hub traffic with varying service levels, as well as price equilibrium in competitive markets. Copyright Springer Science+Business Media New York 2015

Keywords: Uncapacitated multiple allocation hub location; Quality of service (QoS) price equilibrium problems; Benders decomposition algorithms (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/s11067-014-9276-0

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