Hierarchical multimodal hub location problem with time-definite deliveries

Hierarchical multimodal hub location problem is a cost-minimizing hub covering problem where two types of hubs and hub links, accounting for ground and air transportation, are to be established, while ensuring time-definite deliveries. We propose a mixed-integer programming formulation and perform a comprehensive sensitivity analysis on the Turkish network. We show that the locations of airport hubs are less sensitive to the cost parameters compared to the locations of ground hubs and it is possible to improve the service quality at not much additional cost in the resulting multimodal networks. Our methodology provides the means for a detailed trade-off analysis.

► Design a hub network with multiple modes and delivery time restrictions.
► Propose an MIP formulation, efficient variable fixing rules, and valid inequalities.
► Computational analysis is presented on various instances from the Turkish network.
► Effects of delivery time on the total cost and hub locations are analyzed.
► Effects of operating costs on the resulting hub networks are analyzed.