Publication
Title
Measuring and rewarding flexibility in collaborative distribution, including two-partner coalitions
Author
Abstract
Horizontal collaboration among shippers is gaining traction as a way to increase logistic efficiency. The total distribution cost of a logistic coalition is generally between 9% and 30% lower than the sum of costs of each partner distributing separately. However, the coalition gain is highly dependent on the flexibility that each partner allows in its delivery terms. Flexible delivery dates, flexible order sizes, order splitting rules, etc., allow the coalition to exploit more opportunities for optimization and create better and cheaper distribution plans. An important challenge in a logistic coalition is the division (or sharing) of the coalition gain. Several methods have been proposed for this purpose, often stemming from the field of game theory. This paper states that an adequate gain sharing method should not only be fair, but should also reward flexibility in order to persuade companies to relax their delivery terms. Methods that limit the criteria for cost allocation to the marginal costs and the values of the subcoalitions are found to be able to generate adequate incentives for companies to adopt a flexible position. In a coalition of two partners however, we show that these methods are not able to correctly evaluate an asymmetric effort to be more flexible. For this situation, we suggest an alternative approach to better measure and reward the value of flexibility.
Language
English
Source (journal)
European journal of operational research. - Amsterdam
Publication
Amsterdam : 2014
ISSN
0377-2217
DOI
10.1016/J.EJOR.2014.04.015
Volume/pages
239 :1 (2014) , p. 157-165
ISI
000339148900014
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Project info
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identifier
Creation 27.06.2014
Last edited 09.10.2023
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