A hub-network layout problem balancing the budget and passenger transport cost

Abstract

In a given network in rural areas with weak infrastructures, passengers need to transfer in a hub to the destination, while hub and network layout will both affect travel time and costs. In order to improve infrastructure service level and to reduce the passenger transport cost, two measures are proposed: increase hub facilities or increase route facilities. The problem is how to balance the increase of infrastructure investment and the decrease of passenger transport cost under the assumption of a given demand. Based on this problem, an integrated optimization model is established and applied to a small network. In addition, if the network should be rebuilt, a budget constraint could be added to the above model. We analyzed the sensitivity of two measures on the budget, which will help allocate the limited budget reasonably and provide decision reference on balancing hub and route construction.