IDEAS home Printed from https://ideas.repec.org/p/hhs/nhhfms/2006_015.html
   My bibliography  Save this paper

Cost allocation in collaborative forest transportation

Author

Listed:
  • Frisk, Mikael

    (Skogforsk, Uppsala)

  • Göthe-Lundgren, Maud

    (Department of Mathematics, Linköpings universitet)

  • Jörnsten, Kurt

    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

  • Rönnqvist, Mikael

    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

Abstract

Transportation planning is an important part of the wood flow chain in forestry. There are often several forest companies operating in the same region and co-ordination between two or more companies is rare. However, there is an increasing interest in collaborative planning as the potential savings are large, often in the range 5-15%. A key question is how savings should be distributed among the participants. In this paper we investigate a number of possibilities based on economic models including Shapley value, the nucleolus, separable and non-separable costs, shadow prices and volume weights. We also propose a new allocation method based on finding as equal relative profits as possible among the participants. A case study including eight forest companies is described and analyzed.

Suggested Citation

  • Frisk, Mikael & Göthe-Lundgren, Maud & Jörnsten, Kurt & Rönnqvist, Mikael, 2006. "Cost allocation in collaborative forest transportation," Discussion Papers 2006/15, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2006_015
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/11250/163868
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tijs, S.H. & Driessen, T.S.H., 1986. "Game theory and cost allocation problems," Other publications TiSEM 376c24c5-c95d-4d29-96b6-4, Tilburg University, School of Economics and Management.
    2. SCHMEIDLER, David, 1969. "The nucleolus of a characteristic function game," LIDAM Reprints CORE 44, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Lemaire, Jean, 1984. "An Application of Game Theory: Cost Allocation," ASTIN Bulletin, Cambridge University Press, vol. 14(1), pages 61-81, April.
    4. S. H. Tijs & T. S. H. Driessen, 1986. "Game Theory and Cost Allocation Problems," Management Science, INFORMS, vol. 32(8), pages 1015-1028, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. M. Fiestras-Janeiro & Ignacio García-Jurado & Manuel Mosquera, 2011. "Cooperative games and cost allocation problems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(1), pages 1-22, July.
    2. van den Brink, René & Chun, Youngsub & Funaki, Yukihiko & Zou, Zhengxing, 2023. "Balanced externalities and the proportional allocation of nonseparable contributions," European Journal of Operational Research, Elsevier, vol. 307(2), pages 975-983.
    3. Rene van den Brink & Youngsub Chun & Yukihiko Funaki & Zhengxing Zou, 2021. "Balanced Externalities and the Proportional Allocation of Nonseparable Contributions," Tinbergen Institute Discussion Papers 21-024/II, Tinbergen Institute.
    4. Skovsgaard, Lise & Jensen, Ida Græsted, 2018. "Recent trends in biogas value chains explained using cooperative game theory," Energy Economics, Elsevier, vol. 74(C), pages 503-522.
    5. Benjamin R. Auer & Tobias Hiller, 2021. "Cost gap, Shapley, or nucleolus allocation: Which is the best game‐theoretic remedy for the low‐risk anomaly?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 876-884, June.
    6. Gao, Evelyn & Sowlati, Taraneh & Akhtari, Shaghaygh, 2019. "Profit allocation in collaborative bioenergy and biofuel supply chains," Energy, Elsevier, vol. 188(C).
    7. 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).
    8. Ramaekers, Katrien & Verdonck, Lotte & Caris, An & Meers, Dries & Macharis, Cathy, 2017. "Allocating collaborative costs in multimodal barge networks for freight bundling," Journal of Transport Geography, Elsevier, vol. 65(C), pages 56-69.
    9. DEFRYN, Christof & SÖRENSEN, Kenneth & CORNELISSENS, Trijntje, 2015. "The selective vehicle routing problem in a collaborative environment," Working Papers 2015006, University of Antwerp, Faculty of Business and Economics.
    10. Mehmet Onur Olgun & Erdal Aydemir, 2021. "A new cooperative depot sharing approach for inventory routing problem," Annals of Operations Research, Springer, vol. 307(1), pages 417-441, December.
    11. Lozano, S. & Moreno, P. & Adenso-Díaz, B. & Algaba, E., 2013. "Cooperative game theory approach to allocating benefits of horizontal cooperation," European Journal of Operational Research, Elsevier, vol. 229(2), pages 444-452.
    12. Juan Aparicio & Joaquín Sánchez-Soriano, 2008. "Depreciation games," Annals of Operations Research, Springer, vol. 158(1), pages 205-218, February.
    13. Salant, David J, 2007. "Formulas for fair, reasonable and non-discriminatory royalty determination," MPRA Paper 8569, University Library of Munich, Germany.
    14. Zhang, Ranran & Ma, Weimin & Si, Hongyun & Liu, Jinjin & Liao, Le, 2021. "Cooperative game analysis of coordination mechanisms under fairness concerns of a green retailer," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    15. DEFRYN, Christof & VANOVERMEIRE, Christine & SÖRENSEN, Kenneth & VAN BREEDAM, Alex & VANNIEUWENHUYSE, Bart & VERSTREPEN, Sven, 2014. "Gain sharing in horizontal logistic collaboration. A case study in the fresh fruit and vegetables sector," Working Papers 2014004, University of Antwerp, Faculty of Business and Economics.
    16. Florian Kellner & Andreas Otto, 2012. "Allocating CO 2 emissions to shipments in road freight transportation," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 451-479, January.
    17. Lozano, S., 2012. "Information sharing in DEA: A cooperative game theory approach," European Journal of Operational Research, Elsevier, vol. 222(3), pages 558-565.
    18. Christoph Weissbart, 2018. "Decarbonization of Power Markets under Stability and Fairness: Do They Influence Efficiency?," ifo Working Paper Series 270, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    19. Homburg, Carsten & Scherpereel, Peter, 2008. "How should the cost of joint risk capital be allocated for performance measurement?," European Journal of Operational Research, Elsevier, vol. 187(1), pages 208-227, May.
    20. Dóra Balog & Tamás László Bátyi & Péter Csóka & Miklós Pintér, 2014. "Properties of risk capital allocation methods: Core Compatibility, Equal Treatment Property and Strong Monotonicity," CERS-IE WORKING PAPERS 1417, Institute of Economics, Centre for Economic and Regional Studies.

    More about this item

    Keywords

    Transportation; OR in natural resources; Supply chain management; Economics; Group decisions and negotiations; Linear programming;
    All these keywords.

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:nhhfms:2006_015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stein Fossen (email available below). General contact details of provider: https://edirc.repec.org/data/dfnhhno.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.