Optimal Facility Location and Network Design in Hazardous Materials Transportation via Lane Reservation

The demand for hazardous material transportation in many countries is increasing each year. However, once accidents occur during hazardous material transportation, they will often cause irreversible consequences. The risk probability can be reduced by transporting hazardous materials on reserved lanes. This study considers a Stackelberg game and lane reservation strategy in the form of a bi-level optimization problem that simultaneously optimizes facility locations and network design in hazardous materials transportation. In the upper level (government), the leader intends to reduce facility setup cost, traffic impact cost and hazmat exposure risk by setting a reserved lane network and requiring carriers to ship in the network. In the lower level (Carrier), the follower intends to reduce shipping costs by selecting a route that meets the time limit. In order to solve the model, a genetic algorithm based on real number code is developed. Finally, computational results verify the efficiency of the proposed approach and model using an instance based on the Sioux Falls network.