The Hub-and-Spoke Model - A Tutorial

Abstract

The paper introduces the reader to the subject matters of transportation networks, linear programming (the direct program, the dual program and complementary slackness conditions), programming with 0-1 variables, and coding in GAMS (general algebraic modeling system). Operations analyst have long distinguished a series of "model types" in economic logistics, such as the transportation model, the network model, and so on. It will here be suggested that among these, the hub-and-spoke model deserves separate recognition and study. To demonstrate its main characteristics, small stylized numerical examples are presented.

Keywords: hub and spoke, economic logistics, linear programming, GAMS

JEL Classification: C61, C63, C88, L91, R41