Simulated annealing‐based algorithm for the capacitated hub routing problem

Routing traffic across a capacitated hub‐and‐spoke network is very common in freight transportation and telecommunications. Most of the hub‐and‐spoke network models available in the literature assume a fully inter‐connected hub network and allow traffic to pass through a maximum of two hubs. In the absence of a fully inter‐connected hub network, the traffic may have to be routed through more than two hubs. In this paper, we develop a mathematical model and a simulated annealing (SA)‐based solution methodology for routing freight through not more than three hubs in a given capacitated network. We generate test problem instances to evaluate the efficacy of the mathematical model and the meta‐heuristic procedure. The effect of each network parameter on the performance of the SA procedure is analysed thoroughly with extensive computational experiments and relevant statistical tests. The results show that near‐optimal solutions for large problem instances can be derived in little computational time.