Title: Pricing decision in a multi-period hub location problem under uncertainty: a mathematical model

Authors: Mahdieh Zare Bidoki; Masoud Rahiminezhad Galankashi; Mostafa Setak

Addresses: Department of Industrial Engineering, K.N. Toosi University of Technology, Tehran, Iran ' Imam Khomeini International University-Buin Zahra Higher Education Center of Engineering and Technology, Iran ' Department of Industrial Engineering, K.N. Toosi University of Technology, Tehran, Iran

Abstract: This research develops a multi-period mathematical model to address the hub covering location problem (HCLP) considering competitiveness, pricing, demand uncertainty and congestion. Although the HCLP is investigated in previous studies, concurrent investigation of these issues is less investigated. To fill the gap, this study models the HCLP with regard to aforementioned issues to maritime transportation problem. Particularly, it is assumed that the products are perishable and should be delivered in a specific time, the hubs' capacities are limited, and they face congestion if the demand exceeds a defined value. An M/M/C queue system is applied to deal with the congestion. A nonlinear mathematical model is proposed and a medium-sized case study is applied to address the concerns of this research. According to the results, customers are highly interested in competitive criteria of price and delivery time. Based on sensitivity analysis, price significantly affects the competitiveness and capability of absorbing new customers.

Keywords: hub covering location problem; HCLP; pricing; uncertainty; stochastic demand.

DOI: 10.1504/IJVCM.2021.119400

International Journal of Value Chain Management, 2021 Vol.12 No.4, pp.370 - 399

Received: 30 Oct 2020
Accepted: 30 Jan 2021
Published online: 02 Dec 2021 *

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