Ranking Allocation Scheme for Cost Sharing in Logistics

Anna TATARCZAK, Jarosław BANAS, Lech KRUS

Abstract


By establishing collaborative relationships at the same level in the supply chain, companies can reduce logistics costs and become more competitive. This paper investigates the synergies between participants in logistics horizontal supply chain collaboration. In particular, carriers exploit synergies by using joint delivery mechanisms among themselves in order to reduce empty lanes and thus increase transportation savings. A key question is how the costs should be fairly distributed among the collaborative partners in order to ensure significant cooperation. Although there are studies on cost sharing using the game theory approach and other decision making techniques separately, according to the authors’ knowledge there is no work that integrates these aspects in a common framework. This paper proposes an integrated method to solve such problems using the cooperating game theory with a view on spreading the cost among freight carriers. A decision support system is presented including the ranking procedure leading to the selection of the cost allocation rule advantageous for all partners. The effectiveness of the method is illustrated on a real-case example.

Keywords


Logistics, Horizontal cooperation, Joint route planning, Game theory, Multi-criteria decision- making


DOI
10.12783/dtcse/optim2018/27934

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