This article presents a new spatial modeling approach that deals with interactions between individual geographic entities. The developed model represents a generalization of the transportation problem and the classical assignment problem and is termed the hierarchical assignment problem (HAP). The HAP optimizes the spatial flow pattern between individual origin and destination locations, given that some grouping, or aggregation of individual origins and destinations is permitted to occur. The level of aggregation is user specified, and the aggregation step is endogenous to the model itself. This allows for the direct accounting of aggregation costs in pursuit of optimal problem solutions. The HAP is formulated and solved with several sample data sets using commercial optimization software. Trials illustrate how HAP solutions respond to changes in levels of aggregation, as well as reveal the diverse network designs and allocation schemes obtainable with the HAP. Connections between the HAP and the literature on the p-median problem, cluster analysis, and hub-and-spoke networks are discussed and suggestions for future research are made.
IntroductionThe transportation problem (TP) is a widely used spatial optimization procedure that minimizes interaction costs between origin and destination locations subject to capacity constraints (Hitchcock 1941;Taaffe, Gauthier, and O'Kelly 1996). Applications of the TP are quite varied including its use in the wood processing industry, agriculture, school district delineation, and in modeling aspects of journey to work travel (White 1988;Taaffe, Gauthier, and O'Kelly 1996). The classical assignment problem (AP) is a similar optimization procedure also entailing matching resources or assets [supply] with tasks [demand] such that costs are minimized (Kuhn 1955). Management scientists utilize the AP to assign workers to tasks (Ross and Soland 1975). Similarly, industrial engineers employ the AP to pair production machinery A major feature separating these two interaction models is that the TP often deals with aggregates of entities at origin and destination locations, while the AP is concerned with individual entities at separate origin and destination locations. In a typical TP application, agricultural production and consumption patterns are estimated by zone, and then flows between zones are optimized (Auburn 1988). The AP, in contrast, would be used in a situation to optimize assignments between individual farmers and warehouses. Researchers interested in these problems must choose between using exogenously generated aggregates input into the TP, or using totally disaggregate geographic entities input into the AP. Ideally, the level and configuration of aggregation would be a choice in such an interaction problem, rather than an exogenous input as is the case with the TP.Previous literature, to the extent that it has examined aggregation issues, has taken several tracks. First, aggregation in location problems has been viewed as a means of reducing problem size (see Orlin an...