Journal of Uncertain Systems, Vol1 No3, 2007, August, World Academic Union (World Academic Press)

This paper studies the robust optimization for the single allocation p-hub median problem under discount factor uncertainty. We develop the discount factor as a novel uncertain parameter, which represents different connection modes between hubs. The discount factor can be described by a random variable with discrete distribution in nominal case. We apply a robust optimization approach to deal with the perturbation of probability in special circumstances and control it by an interval uncertainty set. The robust counterpart model has been shown tractable by using commercial solver. Finally, computational experiments are given to demonstrate the robustness by comparing the performance with the nominal and robust solutions. The results indicate robust model can immunize the system against parameter perturbations relative to nominal model. c ©2017 World Academic Press, UK. All rights reserved.