Profit allocation in the cooperation among the enterprises under the risks of supply chain

Abstract

According to features of the enterprises cooperation among supply chain, the collaborative profit allocation game is established and additional properties as extended individual rationality and extended stability are defined based on well-known properties from the cooperative game theory. It is pointed out that the established game has a non-empty core when supply chain enterprises share all their requests and their cost structures are identical. Shapley value and Nucleolus are then discussed. Considering the risks, contribution difference and relative savings, the profit allocation model under the risks of supply chain is proposed in order to overcome shortcomings of the existing solution concepts. AHP and Fuzzy Comprehensive Evaluation Method can be applied to the coefficient of the risks and in the paper AHP is adopted. And the Computational results for real-life instances show that the profit allocation derived from the proposed model, which is fair, rational and easy to implement, is in the core and satisfies the defined additional properties. Thus, the proposed model is an effective profit allocation mechanism for supply chain enterprises' collaboration and the risks coefficient is fully considered.