λ-Cent-Dians and Generalized-Center for Network Design

In this paper, we extend the notions of λ-cent-dian and generalized-center from Facility Location Theory to the more intricate domain of Network Design. Our focus is on the task of designing a sub-network within a given underlying network while adhering to a budget constraint. This sub-network is intended to efficiently serve a collection of origin/destination pairs of demand. The λ-cent-dian problem studies the balance between efficiency and equity. We investigate the properties of the λ-cent-dian and generalized-center solution networks under the lens of equity, efficiency, and Pareto-optimality. We provide a mathematical formulation for λ≥ 0 and discuss the bilevel structure of this problem for λ>1. Furthermore, we describe a procedure to obtain a complete parametrization of the Pareto-optimality set based on solving two mixed integer linear formulations by introducing the concept of maximum λ-cent-dian. We evaluate the quality of the different solution concepts using some inequality measures. Finally, for λ∈[0,1], we study the implementation of a Benders decomposition method to solve it at scale.