A competitive hub location and pricing problem

Armin Lüer-Villagra, Vladimir Marianov

Resultado de la investigación: Article

50 Citas (Scopus)

Resumen

We formulate and solve a new hub location and pricing problem, describing a situation in which an existing transportation company operates a hub and spoke network, and a new company wants to enter into the same market, using an incomplete hub and spoke network. The entrant maximizes its profit by choosing the best hub locations and network topology and applying optimal pricing, considering that the existing company applies mill pricing. Customers' behavior is modeled using a logit discrete choice model. We solve instances derived from the CAB dataset using a genetic algorithm and a closed expression for the optimal pricing. Our model confirms that, in competitive settings, seeking the largest market share is dominated by profit maximization. We also describe some conditions under which it is not convenient for the entrant to enter the market.

Idioma originalEnglish
Páginas (desde-hasta)734-744
Número de páginas11
PublicaciónEuropean Journal of Operational Research
Volumen231
N.º3
DOI
EstadoPublished - 16 dic 2013

Huella dactilar

Competitive Location
Hub Location
Pricing
Profit
Costs
Profitability
Discrete Choice Models
Industry
Logit
Network Topology
Customers
Genetic algorithms
Maximise
Topology
Genetic Algorithm
Closed
Hub-and-spoke network
Hub location
Optimal pricing
Market

ASJC Scopus subject areas

  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

Citar esto

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A competitive hub location and pricing problem. / Lüer-Villagra, Armin; Marianov, Vladimir.

En: European Journal of Operational Research, Vol. 231, N.º 3, 16.12.2013, p. 734-744.

Resultado de la investigación: Article

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