The usability of hub location models heavily depends on an appropriate modelling approach for the economies of scale. Realistic hub location models require more sophisticated transport cost structures than the traditional flow-independent discount. We develop a general modelling scheme for such problems allowing the definition of complicated (non-linear) costs and constraints; its structure allows an abstract definition of neighbourhood to use in metaheuristic algorithms. We test the approach on three models for hub location problems, using selfgenerated data for gauging and the AP data set for testing. We see that even large instances can be solved, but the gap to (nearly) optimal solutions is still to close.
Institute of Transport Logistics, TU Dortmund, Germany, October 2014