The Uncapacitated Hub Location Problem with Allocation Constraints

This research deals with the hub location problems with allocation constraints. Compared to the other studies of the hub location problems, this research is more appropriate for practical situations, since the allocation of each non-hub to the hubs is properly constrained. In hub-and-spoke networks, all hubs, which act as transshipment points for internodal flows, are interconnected and the direct flows between spokes (i.e., non-hubs) are not allowed (i.e., all flows must be routed through the hubs). In order to benefit from the adoption of hub-and-spoke networks, the challenge is to design these networks such that the total cost is minimized. In this research a hybrid heuristic, based on the simulated annealing method, tabu lists, and improvement procedures, is developed to determine the number of hubs, to properly locate the hubs, and to determine the path for each origin-destination pair. Computational characteristics of the proposed hybrid heuristic are evaluated through extensive computational experiments using the revised CAB data set. Computational results indicate that the presented heuristic is capable of obtaining optimal solutions for all tested problems and obtains better results than a random descent heuristic.