Solving the p-hub Median Problem Under Intentional Disruptions Using Simulated Annealing

Hubs are special facilities designed to act as switching, transshipment and sorting points in various distribution systems. Since hub facilities concentrate and consolidate flows, disruptions at hubs could have large effects on the performance of a hub network. In this paper, we have formulated the multiple allocation p-hub median problem under intentional disruptions as a bi-level game model. In this model, the follower’s objective is to identify those hubs the loss of which would most diminish service efficiency. Moreover, the leader’s objective is to identify the set of hubs to locate in order to minimize expected transportation cost while taking normal and failure conditions into account. We have applied two algorithms based on simulated annealing to solve the defined problem. In addition, the algorithms have been calibrated using the Taguchi method. Computational experiments on different instances indicate that the proposed algorithms would be efficient in practice. Copyright Springer Science+Business Media New York 2013