Hub and Spoke Logistics Network Design for Urban Region with Clustering-Based Approach
Published in The 34th International Conference on Industrial, Engineering & Other Applications of Applied Intelligent Systems (IEA/AIE), 2021
Recommended citation: Quan Duong, Dang Nguyen, Quoc Nguyen (2021). "Hub and Spoke Logistics Network Design for Urban Region with Clustering-Based Approach." In: Fujita H., Selamat A., Lin J.CW., Ali M. (eds) Advances and Trends in Artificial Intelligence. Artificial Intelligence Practices. IEA/AIE 2021. Lecture Notes in Computer Science, vol 12798. Springer, Cham. https://doi.org/10.1007/978-3-030-79457-6_51. https://link.springer.com/chapter/10.1007/978-3-030-79457-6_51
This study aims to propose effective modeling and approach for designing a logistics network in the urban area in order to offer an efficient flow distribution network as a competitive strategy in the logistics industry where demand is sensitive to both price and time. A multi-stage approach is introduced to select the number of hubs and allocate spokes to the hubs for flow distribution and hubs’ location detection. Specifically, a fuzzy clustering model with the objective function is to minimize the approximate transportation cost is employed, in the next phase is to focus on balancing the demand capacity among the hubs with the help of domain experts, afterward, the facility location vehicle routing problems within the network is introduced. To demonstrate the approach’s advantages, an experiment was performed on the designed network and its actual transportation cost for the real operational data in which specific to the Ho Chi Minh city infrastructure conditions. Additionally, we show the flexibility of the designed network in the flow distribution and its computational experiments to develop the managerial insights which contribute to the network design decision-making process.