Benders Decomposition for Hub Location Problems with Economies of Scale

Authors:
Ricardo Saraiva de Camargo;Gilberto de Miranda;Henrique Pacca L. Luna
Affiliations:
Department of Applied and Exact Sciences, Federal University of Ouro Preto, João Monlevade, 35931-026, Minas Gerais, Brazil;Department of Industrial Engineering, Federal University of Minas Gerais, Pampulha, 30161-010, Belo Horizonte, Minas Gerais, Brazil;Computer Sciences Institute, Federal University of Alagoas, Campus A. C. Simões, Tabuleiro dos Martins, 57072-970, Maceió, Alagoas, Brazil
Venue:
Transportation Science
Year:
2009

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Abstract

When considering hub-and-spoke networks with multiple allocation, the classical models of the literature compute solutions with large discount factors for small flows on interhub connections. Addressing the economies of scale issue, a tighter formulation for this problem is presented, bringing forward a special structure. A specialized version of Benders decomposition is then developed to solve large instances in reasonable time.