Risk-averse hub location: Formulation and solution approach
In this study, we present risk-neutral and risk-averse two-stage stochastic formulations for the uncapacitated multiple allocation p-hub median problem and discuss the impact of risk-aversion on the optimal solution. Although stochastic models are useful to tackle the uncertainty in problem paramete...
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Published in | Computers & operations research Vol. 143; p. 105760 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
New York
Elsevier Ltd
01.07.2022
Pergamon Press Inc |
Subjects | |
Online Access | Get full text |
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Summary: | In this study, we present risk-neutral and risk-averse two-stage stochastic formulations for the uncapacitated multiple allocation p-hub median problem and discuss the impact of risk-aversion on the optimal solution. Although stochastic models are useful to tackle the uncertainty in problem parameters, the solution of these models requires higher computational effort than their deterministic counterparts. Therefore, we present a scenario decomposition algorithm for the stochastic formulations. To evaluate the performance of the proposed solution algorithm, a set of computational experiments is conducted on real data sets. The results show that the proposed algorithm is very effective in finding optimal or near-optimal solutions in significantly shorter computation time than that of deterministic equivalent problems.
•We present two-stage stochastic formulations for the hub location problem.•We propose a scenario decomposition algorithm to solve the stochastic models.•The proposed algorithm is very effective in finding optimal/near-optimal solutions. |
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ISSN: | 0305-0548 1873-765X 0305-0548 |
DOI: | 10.1016/j.cor.2022.105760 |