Risk-averse hub location: Formulation and solution approach

Kargar K., Mahmutoğulları A. İ.

COMPUTERS & OPERATIONS RESEARCH, vol.143, 2022 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 143
  • Publication Date: 2022
  • Doi Number: 10.1016/j.cor.2022.105760
  • Journal Name: COMPUTERS & OPERATIONS RESEARCH
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus, PASCAL, ABI/INFORM, Aerospace Database, Applied Science & Technology Source, Business Source Elite, Business Source Premier, Communication Abstracts, Computer & Applied Sciences, INSPEC, Metadex, zbMATH, Civil Engineering Abstracts
  • Keywords: Hub location, Risk-averse optimization, Stochastic programming, Scenario decomposition, SPOKE NETWORK DESIGN, OPTIMIZATION, DISRUPTION, BOUNDS
  • TED University Affiliated: Yes

Abstract

In this study, we present risk-neutral and risk-averse two-stage stochastic formulations for the uncapacitated multiple allocation p-hub median problem and discuss the impact of risk-aversion on the optimal solution. Although stochastic models are useful to tackle the uncertainty in problem parameters, the solution of these models requires higher computational effort than their deterministic counterparts. Therefore, we present a scenario decomposition algorithm for the stochastic formulations. To evaluate the performance of the proposed solution algorithm, a set of computational experiments is conducted on real data sets. The results show that the proposed algorithm is very effective in finding optimal or near-optimal solutions in significantly shorter computation time than that of deterministic equivalent problems.