Flow Merging and Hub Route Optimization in Collaborative Transportation

Abstract

This paper studies the optimal hub routing problem of merged tasks in collaborative transportation. This problem allows all carriers’ transportation tasks to reach the destinations optionally passing through 0, 1, or 2 hubs within limited distance, while a cost discount on arcs in the hub route could be acquired after paying fixed charges. The problem arises in the application of logistics, postal services, airline transportation, and so forth. We formulate the problem as a mixed-integer programming model, and provide two heuristic approaches, respectively, based on Lagrangian relaxation and Benders decomposition. Computational experiments show that the algorithms work well.