Reactive GRASP for the Capacitated Single Allocation p-Hub Median Problem

In this paper we consider a capacitated single allocation p-hub median problem (CSApHMP) which is to determine the location of p hubs, the allocation of non-hub nodes to hubs in the logistics network. This problem is formulated as an integer programming model with the objective of minimizing the sum of total transportation cost and fixed cost of the selected p hubs. Since the CSApHMP is NP-hard, it is difficult to obtain optimal solution within a reasonable computational time with exact solution approach. We only solve the CSApHMP using Gurobi optimizer for the small sized problems. A reactive greedy randomized adaptive search procedure (GRASP) is proposed to solve the problem. To illustrate the effectiveness of the proposed reactive GRASP algorithm, a comparative study from the benchmark instances is also presented. The experimental results show that the proposed GRASP heuristic can be an effective solution method for the capacitated hub location problem.