Outer-approximation algorithms for a competitive multiple allocation p-hub location

Vol 57, 2025 - 341123
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Abstract

We propose outer-approximation methods for multiple-allocation p-hub location problems in a competitive setting. An entrant must locate p hubs to design a hub-and-spoke network for origin-destination pairs, seeking to maximize market share against incumbents. Flows use paths with one or two hubs, and each origin-destination pair may use multiple routes. We reformulate the problem by minimizing market loss instead of maximizing market share, obtaining equivalent models better suited to conic solvers and outer-approximation. Our outer-approximation algorithms significantly outperform CPLEX’s conic solver in numerical experiments, demonstrating strong practical effectiveness.

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Institutions
  • 1 CEFET-MG
  • 2 Universidade Federal de Minas Gerais
  • 3 Universidade Federal de Ouro Preto
Track
  • OD-Discrete Optimization
Keywords
Hub location
competitive facility location
mixed-integer quadratic conic programming
mixed-integer non-linear optimization