Abstract: This work develops a bi-level optimization model for locating bus stops to minimize the social cost of the overall transport system. The work takes into account possible changes in demand due to different bus stop locations considering congestion on buses, interaction with private traffic, operational variables (fleet, frequency, operator budgets), and the socio-demographic characteristics of each zone in the urban area. Finally, the technique is applied to a real case and a sensitivity analysis is performed to check how the different variables analysed influence the solution provided by the model.

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