The sharing of benefits from a logistics alliance based on a hub-spoke network: A cooperative game theoretic approach

Minyoung Yea, Seokhyun Chung, Tae Su Cheong, Daeki Kim

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This study investigates a strategic alliance as a horizontal cooperation in the logistics and transportation industries by considering various sharing rules with a cooperative game approach. Through forging a strategic alliance, carriers gain extra benefits from resource sharing and high efficiency resource utilization. In particular, our research focuses on the cost savings from using larger vehicles utilizing collective market demand and regarding them as benefits of cooperation. The model conceptualizes the characteristic function of cost savings by coalitions that take into account the hub-spoke network which is common in transportation services. To share the improved profits fairly between members, we use different allocation schemes: the Shapley value, the core center, the τ-value, and the nucleolus. By analyzing those cooperative game theoretic solutions employing an alliance composed of three carriers, we investigate whether satisfaction in this specific coalition provides an incentive for carriers to join such a coalition. Our results from the analysis, with respect to fair allocation schemes, provide a practical and academic foundation for further research.

Original languageEnglish
Article number1855
JournalSustainability (Switzerland)
Volume10
Issue number6
DOIs
Publication statusPublished - 2018 Jun 3

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Logistics
coalition
savings
logistics
Forging
cost
transportation industry
Costs
incentive
Profitability
costs
research focus
resources
market
industry
profit
resource
utilization
Industry
efficiency

Keywords

  • Cooperative game theory
  • Cost allocation
  • Logistics alliance
  • Strategic alliance

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

Cite this

The sharing of benefits from a logistics alliance based on a hub-spoke network : A cooperative game theoretic approach. / Yea, Minyoung; Chung, Seokhyun; Cheong, Tae Su; Kim, Daeki.

In: Sustainability (Switzerland), Vol. 10, No. 6, 1855, 03.06.2018.

Research output: Contribution to journalArticle

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