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Analysis of different cost allocation methods in a collaborative transport setting

Author

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  • Christine Vanovermeire
  • Dries Vercruysse
  • Kenneth Sörensen

Abstract

In collaborative transport, dividing the total cost of the coalition between its different partners is a key issue. However, as each coalition has its own set of preferences and has partners with different characteristics, a cost allocation method suitable in all situations does not exist. In this paper, a set of cost allocation methods, some academic and some used in practice, are evaluated in different situations. We investigate how well these methods behave when partners have different characteristics, e.g., when one partner ships a much larger volume than the others, it is very likely that this partner does not agree to allocate costs according to the volume of each partner. We provide an overview of which cost allocation methods suffice in which situations, showing that a right cost allocation is highly dependent on the characteristics of the coalition.

Suggested Citation

  • Christine Vanovermeire & Dries Vercruysse & Kenneth Sörensen, 2014. "Analysis of different cost allocation methods in a collaborative transport setting," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 4(2), pages 132-150.
    • Handle: RePEc:ids:ijemec:v:4:y:2014:i:2:p:132-150
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    Cited by:

    1. Grigoriev, Alexander & Jung, Verena & Peeters - Rutten, Marianne & Vredeveld, Tjark, 2017. "On the Acceptance of Gain Sharing Methods in Supply Chain Collaboration," Research Memorandum 024, Maastricht University, Graduate School of Business and Economics (GSBE).
    2. Defryn, Christof & Sörensen, Kenneth & Dullaert, Wout, 2019. "Integrating partner objectives in horizontal logistics optimisation models," Omega, Elsevier, vol. 82(C), pages 1-12.
    3. Lotte Verdonck & Katrien Ramaekers & Benoît Depaire & An Caris & Gerrit K. Janssens, 2019. "Analysing the Effect of Partner Characteristics on the Performance of Horizontal Carrier Collaborations," Networks and Spatial Economics, Springer, vol. 19(2), pages 583-609, June.

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