The planar hub location problem: a probabilistic clustering approach

Given the demand between each origin-destination pair on a network, the planar hub location problem is to locate the multiple hubs anywhere on the plane and to assign the traffic to them so as to minimize the total travelling cost. The trips between any two points can be nonstop (no hubs used) or started by visiting any of the hubs. The travel cost between hubs is discounted with a factor. It is assumed that each point can be served by multiple hubs.