The stochastic -hub center problem with service-level constraints |
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Authors: | Thaddeus Sim Timothy J. Lowe Barrett W. Thomas |
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Affiliation: | aLe Moyne College, 1419 Salt Springs Road, Syracuse, NY 13214, USA;bDepartment of Management Sciences, Tippie College of Business, University of Iowa, Iowa City, IA 52242, USA |
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Abstract: | Small package delivery companies offer services where packages are guaranteed to be delivered within a given time-frame. With variability in travel time, the configuration on the hub-and-spoke delivery network is vital in ensuring a high probability of meeting the service-level guarantee. We present the stochastic p-hub center problem with chance constraints, which we use to model the service-level guarantees. We discuss analytical results, propose solution heuristics, and present the results from computational experiments. |
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Keywords: | Hub-and-spoke network Stochastic programming Chance-constrained formulation |
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