An integral constrained generalized hub-and-spoke network design problem

The hub-and-spoke network design problem determines the smallest fleet size with their routes and freight paths to minimize operating costs. We proposed a generalized hub-and-spoke network in a capacitated and directed network configuration that integrates the operations of three common hub-and-spoke networks: pure, stopover and center directs. An implicit enumeration algorithm with embedded integrally constrained multi-commodity min-cost flow was developed. Tested using the FedEx AsiaOne air network, the solution showed that the generalized network structure provided an operational flexibility, using center directs, topoffs/drop-offs, transits and rehandling via hubs, to determine the most cost-effective operations plan.