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Endogenous Effects of Hubbing on Flow Intensities

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Abstract

Location of hub facilities and the allocation decisions in transport networks endogenously affect both the flow intensities and the transportation costs. Since the introduction of the hub location problem to the operations research literature in mid-1980s, many researchers investigated different ways of modelling the effects of hub facilities on the transportation costs. On the other hand, there has been very limited research on their effect on the flow intensities. This study proposes a new approach, inspired by the Bass diffusion model, to forecast the change in the demand patterns generated at different locations as a result of the placement of new hubs. This new model is used in the context of the uncapacitated single allocation p-hub median problem to investigate the effects of endogenous attraction, caused by the spatial interaction of present hubs, on future hub location decisions. Computational results indicate that the location and allocation decisions may be greatly affected when these forecasts are taken into account in the selection of future hub locations.

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Acknowledgments

The authors wish to extend their gratitude to the editor and the two anonymous reviewers for excellent reviews and many constructive and helpful suggestions on earlier versions of this manuscript, which led to significant improvements in the current paper.

The authors extend their special thanks to Mr. Muhammet Ayhan, who offered help in providing empirical data from a domestic airline company, which made it possible to perform the analysis in Section 4.

The second author acknowledges the financial support from the Turkish Academy of Sciences.

Author information

Authors and Affiliations

  1. Department of Industrial Engineering, TED University, Ankara, Turkey

    Mehmet R. Taner

  2. Department of Industrial Engineering, Bilkent University, Ankara, Turkey

    Bahar Y. Kara

Authors
  1. Mehmet R. Taner
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  2. Bahar Y. Kara
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Corresponding author

Correspondence to Mehmet R. Taner.

Appendixes

Appendixes

1.1 Appendix 1

Fig. 14
figure 14

Procedure for investigating the effect of endogenous attraction on future hub location and allocation decisions

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1.2 Appendix 2

The scenarios listed in the tables below are defined as follows.

  • Scenario 1: p-hub location with original flow data

  • Scenario 2: Siting the (p + 1)th hub with the original flow data where the initial p hub’s locations are fixed.

  • Scenario 3: Siting the (p + 1)th hub with the updated flow data where the initial p hub’s locations are fixed.

Table 8 Experiments with Turkish data in which optimum location and/or allocations in opening a third hub are affected from the flow updates when the locations of the first two hubs are fixed
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Table 9 Experiments with Turkish data in which optimum location and/or allocations in opening a fourth hub are affected from the flow updates when the locations of the first three hubs are fixed
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Table 10 Experiments with Turkish data in which optimum location and/or allocations in opening a fifth hub are affected from the flow updates when the locations of the first four hubs are fixed
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1.3 Appendix 3

Table 11 Cost per unit flow in the CAB network with p original and r future hubs when the flows are updated by different procedures (locations of the original hubs fixed)
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Table 12 Cost per unit flow in the Turkish network with p original and r future hubs when the flows are updated by different procedures (locations of the original hubs fixed)
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Taner, M.R., Kara, B.Y. Endogenous Effects of Hubbing on Flow Intensities. Netw Spat Econ 16, 1151–1181 (2016). https://doi.org/10.1007/s11067-015-9314-6

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