This paper deals with a capacitated hub location problem arising in the design of telecommunications networks. The problem is different from the classical hub location problem in two ways: the cost of using an edge is not linear but stepwise and the capacity of an hub restricts the amount of traffic transiting through the hub rather than the incoming traffic. In this paper both an exact and a heuristic method are presented. They are compared and combined to investigate whether it is possible to improve the results within limited computational times.
Computers and Operations Research, Vol. 32, 3227-3245, 2005.