Pricing strategies for the uncapacitated hub location problem with multiple allocation and profit maximization

This article addresses the hub location problem with multiple allocation and fixed installation costs, focusing on profit maximization. Four approaches are evaluated: three of them are based on using prices as a parameter, while a new approach considers prices as decision variables. The proposed models are solved using a solver and instances from the AP dataset. The results indicate that the relationship between price and demand flow alters the behavior of the solutions, impacting the served flow. Furthermore, they show that the model treating price as a decision variable outperforms the fixed-price model, although it requires greater computational effort. These results confirm the importance of integrating pricing decisions into the modeling of hub location problems.