Routing and scheduling decisions in the hierarchical hub location problem

Hubs are facilities that consolidate and disseminate flow in many-to-many distribution systems. The hub location problem considers decisions that include the locations of hubs in a network and the allocations of demand (non-hub) nodes to these hubs. We propose a hierarchical multimodal hub network structure, and based on this network, we define a hub covering problem with a service time bound. The hierarchical network consists of three layers in which we consider a ring-star-star (RSS) network. This multimodal network may have different types of vehicles in each layer. For the proposed problem, we present and strengthen a mathematical model with some variable fixing rules and valid inequalities. Also, we develop a heuristic solution algorithm based on the subgradient approach to solve the problem in more reasonable times. We conduct the computational analysis over the Turkish network and the CAB data sets.