The stochastic pp-hub center problem with service-level constraints

Small package delivery companies offer services where packages are guaranteed to be delivered within a given time-frame. With variability in travel time, the configuration on the hub-and-spoke delivery network is vital in ensuring a high probability of meeting the service-level guarantee. We present the stochastic pp-hub center problem with chance constraints, which we use to model the service-level guarantees. We discuss analytical results, propose solution heuristics, and present the results from computational experiments.