Abstract
In this paper, we focus on how cost allocation can be used as a means to create incentives for collaboration among companies, with the aim of reducing the total transportation cost. The collaboration is assumed to be preceded by a simultaneous invitation of the companies to collaborate. We make use of concepts from cooperative game theory, including the Shapley value, the Nucleolus and the EPM, and develop specific cost allocation mechanisms aiming to achieve large collaborations among many companies. The cost allocation mechanisms are tested on a case study that involves transportation planning activities. Although the case study is from a specific transportation sector, the findings in this paper can be adapted to collaborations in other types of transportation planning activities. Two of the cost allocation mechanisms ensure that any sequence of companies joining the collaboration represents a complete monotonic path, that is, any sequence of collaborating companies is such that the sequences of allocated costs are non-increasing for all companies.
Highlights
Collaboration in transportation has become the subject of a growing area of research, resulting in the development of new transportation planning models
The aim of this paper is to provide as good conditions as possible to achieve large collaborations
The collaboration is achieved by companies being simultaneously invited and are joining sequentially, and the sequence is represented by a path in a network of possible collaborations
Summary
Collaboration in transportation has become the subject of a growing area of research, resulting in the development of new transportation planning models. The main focus of this paper is on the system design, in which the overall aim is to achieve system optimal solutions by reducing the total transportation cost This is usually the case when many companies collaborate, that is, large collaborations exist. The aim of this paper is to provide as good conditions as possible to achieve large collaborations This is done by choosing a suitable cost allocation mechanism, see Sect. With the aim of providing as good conditions as possible to achieve large collaborations, we study the number of complete monotonic paths (MPs), as defined in Cruijssen et al (2005), generated by the use of different cost allocation mechanisms. The contribution of this paper is a number of cost allocation mechanisms for providing cost saving offers to companies joining a collaboration sequentially, with the aim to achieve large collaborations.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
