Collaborative location routing problem for sustainable supply chain design with profit sharing

To identify the sustainability synergies in a collaborative Moroccan dry food wholesale chain, we investigate the financial and ecological effects of implementing horizontal cooperation between three competitor shippers. For business-to-business networks, the key objective is to ensure last-mile delivery to their clients in metropolitan areas. The implementation of this alliance requires studying different aspects, among them the design of the transportation network, fair profit sharing, and collaborative delivery planning. Limited studies have considered the effects of integrating facility location and vehicle routing by addressing multiple goals in the design of a sustainable collaborative supply chain. We model the problem as a periodic two-echelon echelon-periodic location routing problem to integrate different decision levels. In order to investigate the trade-offs between the two opposing goals, a multi-objective approach is adopted. The Epsilon constraint method is used to generate a compromise between economic and ecological impacts. Cost and carbon emission sharing are assessed through the Shapley value mechanism. Furthermore, to determine the effect of parameter changes on the attained savings, a scenario analysis is performed. Results show the positive effect of collaboration among shippers and the importance of using integrated network design models. Environmental considerations in the pursuit of economic goals affect the gains produced and result in various transportation network structures. The performance of the coalition varies under different scenarios. Managerial implications are presented.