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As a special type of network, the hub-spoke network uses a relatively smaller number of arcs to link many origin and destination points via its hubs, and thus, is often regarded as superior to its point-to-point counterpart by many network researchers. In this paper, however, it is argued that the superiority of a hub-spoke network is established solely from the cost minimization perspective and achieved at the very expense of flow (traffic, data, etc.) delay incurred to all flows rerouted via hubs. The paper also argues that a hub-spoke network may not be superior to its point-point counterpart when delay cost is considered. Therefore, the paper proposes that (1) a system-wide optimality, which considers investment cost and flow delay cost, be used for H-S network design, and (2) the tradeoffs for a point-point, hub-spoke, or a mix be investigated before the hub-spoke is selected. To formalize these arguments, a set of quadratic integer optimization programs based on O"Kelly are developed and linearized under a heuristic strategy, which utilizes the binary nature of the 0–1 integer decision variables.

DOI: 10.1007/978-3-319-95351-9_4

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