Supplier-initiated outsourcing: A methodology to exploit synergy in transportation
Over the last decades, transportation has been evolving from a necessary, though low priority function to an important part of business that can enable companies to attain a competitive edge over their competitors. To cut down transportation costs, shippers often outsource their transportation activities to a logistics service provider of their choice. This paper proposes a new procedure that puts the initiative with the service provider instead: supplier-initiated outsourcing. This procedure is based on both operations research and game theoretical insights. To stress the contrast between the traditional push approach of outsourcing, and the here proposed pull approach where the service provider is the initiator of the shift of logistics activities from the shipper to the logistics service provider, we will refer to this phenomenon as insinking. Insinking has the advantage that the logistics service provider can proactively select a group of shippers with a strong synergy potential. Moreover, these synergies can be allocated to the participating shippers in a fair and sustainable way by means of a so-called Shapley Monotonic Path of customized tariffs. Insinking is illustrated by means of a practical example based on data from the Dutch grocery transportation sector.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- A. van den Nouweland & P. Borm & W. van Golstein Brouwers & R. Groot Bruinderink & S. Tijs, 1996.
"A Game Theoretic Approach to Problems in Telecommunication,"
INFORMS, vol. 42(2), pages 294-303, February.
- van den Nouweland, A. & Borm, P. & van Golstein, W. & Bruinderink, R.G. & Tijs, S., 1994. "A Game Theoretic Approach to Problems in Telecommunication," Papers 9407, Tilburg - Center for Economic Research.
- van den Nouweland, C.G.A.M. & Borm, P.E.M. & van Golstein Brouwers, W. & Groot Bruinderink, R. & Tijs, S.H., 1996. "A game theoretic approach to problems in telecommunication," Other publications TiSEM a3b30529-fe17-484c-8eab-7, Tilburg University, School of Economics and Management.
- Ciftci, B.B. & Borm, P.E.M. & Hamers, H.J.M., 2006.
"Population Monotonic Path Schemes for Simple Games,"
2006-113, Tilburg University, Center for Economic Research.
- Barış Çiftçi & Peter Borm & Herbert Hamers, 2010. "Population monotonic path schemes for simple games," Theory and Decision, Springer, vol. 69(2), pages 205-218, August.
- Adler, Nicole, 2001. "Competition in a deregulated air transportation market," European Journal of Operational Research, Elsevier, vol. 129(2), pages 337-345, March.
- Serdar Sayman & Stephen J. Hoch & Jagmohan S. Raju, 2002. "Positioning of Store Brands," Marketing Science, INFORMS, vol. 21(4), pages 378-397, June.
- Diwakar Gupta & Yigal Gerchak, 2002. "Quantifying Operational Synergies in a Merger/Acquisition," Management Science, INFORMS, vol. 48(4), pages 517-533, April.
- Peter M. Noble & Thomas S. Gruca, 1999. "Industrial Pricing: Theory and Managerial Practice," Marketing Science, INFORMS, vol. 18(3), pages 435-454.
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
- Dixit, Ashutosh & Braunsberger, Karin & Zinkhan, George M. & Pan, Yue, 2005. "Information technology-enhanced pricing strategies: managerial and public policy implications," Journal of Business Research, Elsevier, vol. 58(9), pages 1169-1177, September.
- Cruijssen, Frans & Cools, Martine & Dullaert, Wout, 2007. "Horizontal cooperation in logistics: Opportunities and impediments," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(2), pages 129-142, March.
- Braysy, Olli & Hasle, Geir & Dullaert, Wout, 2004. "A multi-start local search algorithm for the vehicle routing problem with time windows," European Journal of Operational Research, Elsevier, vol. 159(3), pages 586-605, December.
- Bolton, Lisa E & Warlop, Luk & Alba, Joseph W, 2003. " Consumer Perceptions of Price (Un)Fairness," Journal of Consumer Research, Oxford University Press, vol. 29(4), pages 474-491, March.
- Peter M. Noble & Thomas S. Gruca, 1999. "Response to the Comments on “Industrial Pricing: Theory and Managerial Practice”," Marketing Science, INFORMS, vol. 18(3), pages 458-459.
- Matsubayashi, Nobuo & Umezawa, Masashi & Masuda, Yasushi & Nishino, Hisakazu, 2005. "A cost allocation problem arising in hub-spoke network systems," European Journal of Operational Research, Elsevier, vol. 160(3), pages 821-838, February.
- Ravi Anupindi & Yehuda Bassok & Eitan Zemel, 2001. "A General Framework for the Study of Decentralized Distribution Systems," Manufacturing & Service Operations Management, INFORMS, vol. 3(4), pages 349-368, February.
- Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:207:y:2010:i:2:p:763-774. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.