A collaborative approach based on Shapley value for carriers in the supply chain distribution

Area of Science:

• Operations Research
• Supply Chain Management
• Game Theory

Background:

• Horizontal collaboration among carriers is crucial for efficient supply chain distribution.
• Current tactical planning often lacks mechanisms for effective carrier cooperation.
• Shipper-carrier relationships with multiple carriers and distributed customers present complex coordination challenges.

Purpose of the Study:

• To develop a profit-sharing mechanism for fostering win-win horizontal collaboration between carriers.
• To optimize transport planning for coalitions of carriers serving multiple customers.
• To evaluate the impact of collaboration on carrier profits and customer service levels.

Main Methods:

• Utilizing game theory, specifically the Shapley value, for equitable profit distribution among collaborating carriers.
• Employing a mixed-integer linear programming model to determine optimal transport plans for carrier coalitions.
• Simulating model outputs to generate transport plans and individual carrier profits.
• Validating the collaborative game's super-additivity property.

Main Results:

• Significant profit improvements were observed for individual carriers across all experimental scenarios.
• The proposed collaboration model demonstrably enhances customer service rates.
• The model's effectiveness was validated in contexts with and without subcontracting, using realistic datasets.

Conclusions:

• Horizontal collaboration, facilitated by a fair profit-sharing mechanism, is highly beneficial for carriers in supply chain distribution.
• The integration of game theory and mixed-integer linear programming provides a robust framework for cooperative transport planning.
• The approach leads to mutual benefits for carriers and improved service for customers.