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Toward the fair sharing of profit in a supply network formation

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  • Hennet, Jean-Claude
  • Mahjoub, Sonia

Abstract

The design of a supply chain network can be interpreted as a coalition formation problem in a cooperative game theory and formulated as a linear production game (LPG). The companies that are members of the optimal coalition share their manufacturing assets and resources to produce a set of end-products and globally maximize their profits by selling them in a market. This paper investigates the possibility of combining the requirement of coalition stability with a fair allocation of profits to the participants. It is shown that, in general, the purely competitive allocation mechanism does not exhibit the property of fairness. A technique is proposed to construct a stable and fair allocation system when the core of the game does not exclusively contain a set of competitive allocations.

Suggested Citation

  • Hennet, Jean-Claude & Mahjoub, Sonia, 2010. "Toward the fair sharing of profit in a supply network formation," International Journal of Production Economics, Elsevier, vol. 127(1), pages 112-120, September.
    • Handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:112-120
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    Cited by:

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    2. Bruno Durand & Sonia Mahjoub & Marie-Pascale Senkel, 2014. "Deliveries of the urban internet users : The last mile mutualization in the light of the games theory [La livraison des internautes urbains : La mutualisation du dernier kilomètre à la lumière de l," Post-Print hal-01812875, HAL.
    3. Palsule-Desai, Omkar D. & Tirupati, Devanath & Chandra, Pankaj, 2013. "Stability issues in supply chain networks: Implications for coordination mechanisms," International Journal of Production Economics, Elsevier, vol. 142(1), pages 179-193.
    4. Zhou, Wei & Zhang, Keang & Zhang, Ying & Duan, Yunlong, 2021. "Operation strategies with respect to insurance subsidy optimization for online retailers dealing with large items," International Journal of Production Economics, Elsevier, vol. 232(C).
    5. Schulze, Manuel & Seuring, Stefan & Ewering, Christian, 2012. "Applying activity-based costing in a supply chain environment," International Journal of Production Economics, Elsevier, vol. 135(2), pages 716-725.
    6. Mohebbi, Shima & Li, Xueping, 2015. "Coalitional game theory approach to modeling suppliers' collaboration in supply networks," International Journal of Production Economics, Elsevier, vol. 169(C), pages 333-342.
    7. Guihua Wang & Quan Guo & Qiong Jiang & Butong Li, 2022. "A Study on the Relationship between Corporate Social Responsibility and Supply Chain Profit Distribution in the Context of Common Prosperity," Sustainability, MDPI, vol. 14(19), pages 1-18, September.
    8. Sonia Mahjoub & Jean-Claude Hennet, 2014. "Manufacturers’ Coalition under a Price Elastic Market - a Quadratic Production Game Approach," Post-Print hal-01479690, HAL.
    9. An, Qingxian & Wen, Yao & Ding, Tao & Li, Yongli, 2019. "Resource sharing and payoff allocation in a three-stage system: Integrating network DEA with the Shapley value method," Omega, Elsevier, vol. 85(C), pages 16-25.

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