Hub network design with single and multiple allocation: A computational study

We present exact solutions for hub location models and discuss sensitivity of these solutions to the interhub discount factor. Both multiple and single hub allocations are considered. We employ a linearization that is smaller than any previously used, and we determine the number of variables and constraints. This formulation is used to make extensive computations. Specifically, we include runs for a standard test problem for 3 and 4 hubs, and n = 10, 15, 20 and 25 origins and destinations, although the case with 25 origins and destinations is still large enough to require us to present results for fewer parameter combinations than for the other cases. The results show that the integer-friendliness of the formulation depends on the value of x. A new result in this paper is a determination of the optimal number of hubs as the fixed costs and interhub discount factors change.