TL;DR
This paper investigates the mathematical problem of optimal hub location to minimize total travel distance for shipping networks, and compares the theoretical hub to the actual FedEx hub in Memphis using census data.
Contribution
It formulates the hub location problem mathematically and analyzes the proximity of the FedEx hub to the population centroid based on census data.
Findings
The optimal hub location minimizes total distance to all points.
The FedEx hub in Memphis is close to the population centroid.
Mathematical properties of the hub location problem are explored.
Abstract
The original shipping strategy of FedEx is to fly all packages to a hub location during the afternoon and evening, sort them there, and then fly them to their destinations during the night for delivery the next day. This leads to interesting mathematical questions: Given a population represented by points in Euclidean space or on a sphere, what is the location of the point of the hub that minimizes the total distance to all the points? Is such a point unique? Then using census data from 2000 we examine how close the FedEx hub in Memphis is to the hub for the U.S. population.
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Videos
The FedEx Problem· youtube
