Profit maximization in congested hub location problems: Demand models and service level constraints

Ata Jalili Marand; Pooya Hoseinpour

doi:10.1016/j.tre.2025.103995

Profit maximization in congested hub location problems: Demand models and service level constraints

Institut for Økonomi

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avis › Tidsskriftartikel › Forskning › peer review

1 Citationer (Scopus)

Abstract

This study investigates a congested hub location problem with the aim of optimizing a service provider’s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider’s profitability.

Originalsprog	Engelsk
Artikelnummer	103995
Tidsskrift	Transportation Research Part E: Logistics and Transportation Review
Vol/bind	195
ISSN	1366-5545
DOI	https://doi.org/10.1016/j.tre.2025.103995
Status	Udgivet - mar. 2025

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title = "Profit maximization in congested hub location problems: Demand models and service level constraints",

abstract = "This study investigates a congested hub location problem with the aim of optimizing a service provider{\textquoteright}s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider{\textquoteright}s profitability.",

keywords = "Hub location problem, Congestion, Pricing, Queuing, Mixed integer second-order cone programming",

author = "Marand, {Ata Jalili} and Pooya Hoseinpour",

year = "2025",

month = mar,

doi = "10.1016/j.tre.2025.103995",

language = "English",

volume = "195",

journal = "Transportation Research Part E: Logistics and Transportation Review",

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publisher = "Elsevier Ltd",

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Profit maximization in congested hub location problems: Demand models and service level constraints. / Marand, Ata Jalili; Hoseinpour, Pooya.
I: Transportation Research Part E: Logistics and Transportation Review, Bind 195, 103995, 03.2025.

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avis › Tidsskriftartikel › Forskning › peer review

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AU - Marand, Ata Jalili

AU - Hoseinpour, Pooya

PY - 2025/3

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N2 - This study investigates a congested hub location problem with the aim of optimizing a service provider’s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider’s profitability.

AB - This study investigates a congested hub location problem with the aim of optimizing a service provider’s profit by determining hub locations, capacities, and prices for serving commodities. The study incorporates a price-dependent demand function with a general functional form and models hub operations as M/G/1 queueing systems to address congestion effects. The problem is initially formulated as a mixed-integer nonlinear program, which is subsequently transformed into a mixed-integer second-order cone program, demonstrating solvability with standard off-the-shelf solvers. Through numerical analysis, the study evaluates the influence of different demand functional forms and service time constraints on the optimal network configuration and the service provider’s profitability.

KW - Hub location problem

KW - Congestion

KW - Pricing

KW - Queuing

KW - Mixed integer second-order cone programming

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DO - 10.1016/j.tre.2025.103995

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JO - Transportation Research Part E: Logistics and Transportation Review

JF - Transportation Research Part E: Logistics and Transportation Review

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ER -

Profit maximization in congested hub location problems: Demand models and service level constraints

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