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SUMMARY A mathematical model is developed to optimize social and fiscal sustainable operation of a feeder bus system considering realistic network and heterogeneous demand. The objective total profit is a nonlinear, mixed integer function, which is maximized by optimizing the number of stops, headway, and fare. The stops are located which maximize the ridership. The demand elasticity for the bus service is dependent on passengers' access distance, wait time, in‐vehicle time, and fare. An optimization algorithm is developed to search for the optimal solution that maximizes the profit. The modeling approach is applied to planning a bus transit system within Woodbridge, New Jersey. Copyright © 2011 John Wiley & Sons, Ltd.
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