Liner Shipping Hub Network Design in a Competitive Environment

Publication: ResearchReport – Annual report year: 2010

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A new mixed integer programming formulation is proposed for hub-and-spoke network design in a competitive environment. It addresses competition between a newcomer liner service provider and an alliance, both operating on hub-and-spoke networks. The newcomer company maximizes its market share — proportional to service time and transportation cost —by locating a predefined number of hubs at candidate ports and designing its network. While general-purpose solvers do not solve instances of even small size, an accelerated lagrangian method coupled with a primal heuristic obtains very good bounds. Our computational experiments on real instances of practical size indicate superiority of our approach.
Original languageEnglish
Publication date2010
Place of publicationKgs. Lyngby
PublisherDTU Management
Number of pages16
ISBN (print)87-90-85573-6
StatePublished
NameDTU Management 2010
Number6

Keywords

  • liner shipping, lagrangian decomposition, enumeration, mixed integer programming, hub-and-spoke network design, competition
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