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An empirical study on coalition formation and cost/savings allocation

  • Audy, Jean-François
  • D’Amours, Sophie
  • Rönnqvist, Mikael
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    Interest has been raised by the recent identification of potential savings through collaborative planning in logistics operations. Even though substantial savings can be realized, two key questions exist: (i) how should potential savings be divided among a group of collaborating companies and (ii) among potential collaborating companies, how should collaborating group(s) be formed? These two questions are studied in a specific context: among potential collaborating companies; a subset, denoted the leading companies, performs collaborative planning on behalf of the others and together, they initiate formation of a collaborating group. We use the concept of a business model to detail such context. Based on the literature on network formation where potential savings are modelled by a cooperative game, four business models are explored in four different subsets of leading companies. We propose a network model as a method to determine the stable collaborating group in each computation. A case study including eight forest companies is described and analyzed. Results show that very different solution characteristics can be achieved depending on the business model selected.

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    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 136 (2012)
    Issue (Month): 1 ()
    Pages: 13-27

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    Handle: RePEc:eee:proeco:v:136:y:2012:i:1:p:13-27
    Contact details of provider: Web page: http://www.elsevier.com/locate/ijpe

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    1. Inés Macho-Stadler & David Pérez-Castrillo & Nicolás Porteiro, 2006. "Sequential Formation of Coalitions through Bilateral Agreements in a Cournot Setting," Working Papers 06.01, Universidad Pablo de Olavide, Department of Economics.
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    3. Frisk, Mikael & Göthe-Lundgren, Maud & Jörnsten, Kurt & Rönnqvist, Mikael, 2006. "Cost allocation in collaborative forest transportation," Discussion Papers 2006/15, Department of Business and Management Science, Norwegian School of Economics.
    4. 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.
    5. Cruijssen, F.C.A.M. & Borm, P.E.M. & Dullaert, W. & Hamers, H.J.M., 2007. "Joint Hub Network Development," Discussion Paper 2007-76, Tilburg University, Center for Economic Research.
    6. Chris Clifton & Ananth Iyer & Richard Cho & Wei Jiang & Murat Kantarc{\i}o\u{g}lu & Jaideep Vaidya, 2008. "An Approach to Securely Identifying Beneficial Collaboration in Decentralized Logistics Systems," Manufacturing & Service Operations Management, INFORMS, vol. 10(1), pages 108-125, January.
    7. Hageback, Charlotte & Segerstedt, Anders, 2004. "The need for co-distribution in rural areas--a study of Pajala in Sweden," International Journal of Production Economics, Elsevier, vol. 89(2), pages 153-163, May.
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    13. Le Blanc, H.M. & Cruijssen, F.C.A.M. & Fleuren, H.A. & de Koster, M.B.M., 2004. "Factory Gate Pricing : An Analysis of the Dutch Retail Distribution," Discussion Paper 2004-35, Tilburg University, Center for Economic Research.
    14. Arshinder & Kanda, Arun & Deshmukh, S.G., 2008. "Supply chain coordination: Perspectives, empirical studies and research directions," International Journal of Production Economics, Elsevier, vol. 115(2), pages 316-335, October.
    15. Zapfel, Gunther & Wasner, Michael, 2002. "Planning and optimization of hub-and-spoke transportation networks of cooperative third-party logistics providers," International Journal of Production Economics, Elsevier, vol. 78(2), pages 207-220, July.
    16. S. H. Tijs & T. S. H. Driessen, 1986. "Game Theory and Cost Allocation Problems," Management Science, INFORMS, vol. 32(8), pages 1015-1028, August.
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