Hub Location under Uncertainty: a Minimax Regret Model for the Capacitated Problem with Multiple Allocations
Abstract
In this paper the capacitated hub location problem is formulated by a minimax regret model, which takes into account uncertain setup cost and demand. We focus on hub location with multiple allocations as a strategic problem requiring one definite solution. Investigating how deterministic models may lead to sub-optimal solutions, we provide an efficient formulation method for the problem. A computational analysis is performed to investigate the impact of uncertainty on the location of hubs. The suggested model is also compared with an alternative method, seasonal optimization, in terms of efficiency and practicability. The results indicate the importance of incorporating stochasticity and variability of parameters in solving practical hub location problems. Applying our method to a case study derived from an industrial food production company, we solve a logistical problem involving seasonal demand and uncertainty. The solution yields a definite hub network configuration to be implemented throughout the planning horizon.
Cite
@article{arxiv.1503.05960,
title = {Hub Location under Uncertainty: a Minimax Regret Model for the Capacitated Problem with Multiple Allocations},
author = {Iman Kazemian and Samin Aref},
journal= {arXiv preprint arXiv:1503.05960},
year = {2017}
}
Comments
11 pages, 10 tables, 3 figures, accepted pre-print (author copy) with supplementary data