Mode Choice in a Hub-and-Spoke Network: A Zero-One Linear Programming Approach

While research has tackled the hub-and-spoke network design problem, that research has overlooked the air-truck modal integration issue which is a common feature of real express delivery systems. This paper devises integer linear programs to represent the mode and route assignment aspects of the operational problem. The model is solved under four different levels of delivery schedule, and the results show that as the promised delivery schedule is relaxed, not only does the use of truck routes become more desirable, but also interesting adjustments in mode and hub assignment occur. Consider the case of hubs in Los Angeles and Dayton. As the time constraints are relaxed, cities such as Minneapolis and New Orleans originally linked by air to Los Angeles, switch to Dayton because cheaper truck routes become feasible.     

A Hierarchical Market Model of International Trade

The characteristics of hierarchical trade flows, when placed in the context of differentiated markets, can provide some insight into the underlying bases of contemporary international trade. A model that relies on differentiated market theory and hierarchical market theory is developed. Trade characteristics derived in the model, concerning the frequency and value of trade, are empirically tested. Empirical results indicate that the model provides a useful framework for the analysis of contemporary international trade.     

SHARABLE INPUTS,PRODUCT VARIETY,AND CITY SIZES*

In this paper, I investigate some of the causes of city formation in spatial economies. A model is proposed in which an intermediate differentiated input shared by more than one industry is the cause of the formation of diversified cities. The desire of both the traded-good and the local-good industries to employ a variety of inputs from the intermediate industry provides the reason for the agglomeration of the three industries. In addition, the paper contains a comparative-statics analysis of the model in an open and a closed-city framework. It is demonstrated that the larger the city, the more variety of intermediate inputs the city can provide and the more specialized it is in the production of the traded-good. Moreover, the model suggests that different industrial structures will result in different city Sizes.