MULTI-OBJECTIVE HUB LOCATION PROBLEM IN HUB-AND-SPOKE NETWORK

Ying Lu, Junping Xie

School of Automotive and Traffic Engineering, Jiangsu University, Xuefu Str. 301, 212013 Zhenjiang, China

Through observations from the construction of Chinese national emergency material reserve system, we introduce the multi-objective hub location problem. We provide a mathematical model for finding the optimal hub locations to minimize the total transportation cost and maximize the coverage of the hubs simultaneously in the whole network. Then, a procedure for solving this model is proposed. By using a numerical example, we discuss the efficiency of the tabu-search-based algorithm compared to the complete enumeration method and the impact of cost discount factor on the performance of hub-and-spoke network. The results show that the heuristic algorithm based on tabu search may be better than the complete enumeration research method for big size multi-objective hub location problem and as the cost discount factor is increased, the cost savings in the hub-and-spoke network compared to the direct connect network would decrease while the covering rate remains the same unless the cost discount factor is close to 1. Finally, we set future research directions on the multi-objective hub location problem.