Solving the competitive hub location problem

A mixed integer programming model and three heuristics are proposed to maximize market shares of a smaller liner shipping provider. The aim of this liner shipping provider is to compete with a bigger established liner shipping provider. The problem is essential to the smaller liner shipping provider, since otherwise the dominant larger alliances might force it to go out of business. Because solving the exact model turns out to be hard in practice, this thesis implements a Lagrangian heuristic, tabu search and a genetic algorithm. All heuristics are considerably faster than the exact model and for small instances, good quality solutions are found. Both the tabu search and genetic algorithm are significantly faster than the Lagrangian heuristic. The tabu search provides better objective values for a larger sized instance as compared to the Lagrangian heuristic, whereas the genetic algorithm outperformed both the Lagrangian relaxation and tabu search heuristic for most configurations.