The stochastic p-hub center problem with service-level constraints

Authors:
Thaddeus Sim;Timothy J. Lowe;Barrett W. Thomas
Affiliations:
Le Moyne College, 1419 Salt Springs Road, Syracuse, NY 13214, USA;Department of Management Sciences, Tippie College of Business, University of Iowa, Iowa City, IA 52242, USA;Department of Management Sciences, Tippie College of Business, University of Iowa, Iowa City, IA 52242, USA
Venue:
Computers and Operations Research
Year:
2009

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Abstract

Small package delivery companies offer services where packages are guaranteed to be delivered within a given time-frame. With variability in travel time, the configuration on the hub-and-spoke delivery network is vital in ensuring a high probability of meeting the service-level guarantee. We present the stochastic p-hub center problem with chance constraints, which we use to model the service-level guarantees. We discuss analytical results, propose solution heuristics, and present the results from computational experiments.