Rail-Road terminal locations: aggregation errors and best potential locations on large networks

Abstract

In network location problems, the number of potential locations is often too large in order to find a solution in a reasonable computing time. That is why aggregation techniques are often used to reduce the number of nodes. This reduction of the size of the location problems makes them more computationally tractable, but aggregation introduces errors into the solutions. Some of these errors will be estimated in this paper. A method that helps to isolate the best potential locations for rail-road terminals embedded in a hub-and-spoke network will further be outlined. Hub location problems arise when it is desirable to consolidate flows at certain locations called hubs. The basic idea is to use the flows of commodities and their geographic spreading as input to determine a set of potential locations for hub terminals. The exercise will be done for the trans-European networks. These potential locations can then further be used as input by an optimal location method.