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Distribution Center Consolidation Games

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Author Info

  • Flip Klijn
  • Marco Slikker

Abstract

We study the location-inventory model as introduced by Teo et al. (2001) to analyzethe impact of consolidation of distribution centers on facility and inventory costs. We associate a cooperative game with each location-inventory situation and prove that this game has a non-empty core for identical and independent demand processes. Hence, consolidation does not only lower joint costs (Teo et al. (2001)), but it allows for a stable division of the minimal costs as well.

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File URL: http://research.barcelonagse.eu/tmp/working_papers/118.pdf
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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 118.

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Date of creation: Apr 2004
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Handle: RePEc:bge:wpaper:118

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Keywords: Inventory management; cooperative games;

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  1. Borm, P.E.M. & Hamers, H.J.M. & Hendrickx, R.L.P., 2001. "Operations Research Games: A Survey," Discussion Paper 2001-45, Tilburg University, Center for Economic Research.
  2. Meca, A. & Timmer, J.B. & Garcia-Jurado, I. & Borm, P.E.M., 2004. "Inventory games," Open Access publications from Tilburg University urn:nbn:nl:ui:12-129329, Tilburg University.
    • Meca-Martinez, A. & Timmer, J.B. & Garcia-Jurado, I. & Borm, P.E.M., 1999. "Inventory Games," Discussion Paper 1999-53, Tilburg University, Center for Economic Research.
  3. Muller, Alfred & Scarsini, Marco & Shaked, Moshe, 2002. "The Newsvendor Game Has a Nonempty Core," Games and Economic Behavior, Elsevier, vol. 38(1), pages 118-126, January.
  4. Hartman, Bruce C. & Dror, Moshe & Shaked, Moshe, 2000. "Cores of Inventory Centralization Games," Games and Economic Behavior, Elsevier, vol. 31(1), pages 26-49, April.
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