The capacitated modular single-allocation hub location problem with possibilities of hubs disruptions: modeling and a solution algorithm

The hub location problem (HLP) concerns the location of hub nodes and allocation of other non-hub nodes to hubs in the network. Hubs are particular facilities that serve as mediators through the aggregation, consolidation, classification and distribution of network flows from origin to destination. Most models use constant penalty parameters to calculate the aggregation and distribution cost in the objective function. The selected parameter values can significantly affect the number of hubs and their locations in the network. Furthermore, most studies on HLP assume that network hubs are always operational but every established hub has the potential to fail during use. In this paper, we propose the capacitated modular single allocation hub location problem with possibilities of hub disruptions, whereby a low number of capacitated transportation vehicles is used instead of constant parameters. The problem is modeled as a two-stage stochastic program, and a metaheuristic algorithm based on the adaptive large neighbourhood search is proposed. The computational experiment results demonstrate the high efficiency of the proposed solution method.