Incentive System Framework for Information Sharing in Value-Adding Networks

To meet current market requirements and improve their competitive position, companies cooperate with their partners in value-adding networks. To exploit potential performance improvements, it is essential for companies to increasingly share Production Planning and Control-related data. Financial and non-financial incentives are beneficial to foster the inter-company exchange of such data. This paper proposes an approach for designing an application-specific incentive system framework, forcing information sharing in value-adding networks. The framework is based on a requirements analysis towards both value-adding networks and Production Planning and Control. The outcome of the approach is the possibility of deriving concrete incentive systems. The approach developed was applied and verified in a use case

A Game-Theoretic Approach to Share the Costs of Cooperating Healthcare Networks

The growing demand for healthcare services combined with the disarray in the health insurance market in the United States has created a situation where rival health networks are aggressively competing by building duplicate health facilities and providing redundant services in localized geographic regions. Unfortunately, this strategy can reduce the quality of patient care and decrease profits (Kaissi & Charland, 2013). A solution to this problem is for health networks to cooperate and share healthcare equipment, facilities, and personnel. Toward that end, this paper presents a game-theoretic method that can share these costs in a fair, efficient, and repeatable manner

A user-operator assignment game with heterogeneous user groups for empirical evaluation of a microtransit service in Luxembourg

We tackle the problem of evaluating the impact of different operation policies on the performance of a microtransit service. This study is the first empirical application using the stable matching modeling framework to evaluate different operation cost allocation and pricing mechanisms on microtransit service. We extend the deterministic stable matching model to a stochastic reliability-based one to consider user's heterogeneous perceptions of utility on the service routes. The proposed model is applied to the evaluation of Kussbus microtransit service in Luxembourg. We found that the current Kussbus operation is not a stable outcome. By reducing their route operating costs of 50%, it is expected to increase the ridership of 10%. If Kussbus can reduce in-vehicle travel time on their own by 20%, they can significantly increase profit several folds from the baseline

Balancing partner preferences for logistics costs and carbon footprint in a horizontal cooperation

Horizontal cooperation in logistics has gathered momentum in the last decade as a way to reach economic as well as environmental benefits. In the literature, these benefits are most often assessed through aggregation of demand and supply chain optimization of the partnership as a whole. However, such an approach ignores the individual preferences of the participating companies and forces them to agree on a unique coalition objective. Companies with different (potentially conflicting) preferences could improve their individual outcome by diverging from this joint solution. To account for companies preferences, we propose an optimization framework that integrates the individual partners’ interests directly in a cooperative model. The partners specify their preferences regarding the decrease of logistical costs versus reduced CO2 emissions. Doing so, all stakeholders are more likely to accept the solution, and the long-term viability of the collaboration is improved. First, we formulate a multi-objective, multi-partner location-inventory model. Second, we distinguish two approaches for solving it, each focusing primarily on one of these two dimensions. The result is a set of Pareto-optimal solutions that support the decision and negotiation process. Third, we propose and compare three different approaches to construct a unique solution which is fair and efficient for the coalition. Extensive numerical results not only confirm the potential of collaboration but, more importantly, also reveal valuable managerial insights on the effect of dissimilarities between partners with respect to size, geographical overlap and operational preferences

Analysis of collaborative savings and cost allocation techniques for the cooperative carrier facility location problem

Transport companies may cooperate to increase their efficiency levels by e.g. the exchange of orders or vehicle capacity. In this paper a new approach to horizontal carrier collaboration is presented: the sharing of distribution centres (DCs) with partnering organisations. This problem can be classified as a cooperative facility location problem and formulated as an innovative mixed integer linear program. To ensure cooperation sustainability, collaborative costs need to be allocated fairly to the different participants. To analyse the benefits of cooperative facility location and the effects of different cost allocation techniques, numerical experiments based on experimental design are carried out on a U.K. case study. Sharing DCs may lead to significant cost savings up to 21.6%. In contrast to the case of sharing orders or vehicles, there are diseconomies of scale in terms of the number of partners and more collaborative benefit can be expected when partners are unequal in size. Moreover, results indicate that horizontal collaboration at the level of DCs works well with a limited number of partners and can be based on intuitively appealing cost sharing techniques, which may reduce alliance complexity and enforce the strength of mutual partner relationships

A game-theoretic multi-stakeholder model for cost allocation in urban consolidation centres

Recently, many European local authorities have set up Urban Consolidation Centres (UCC) for dealing with challenges arising from the environmental and social impacts of logistical activities in urban contexts through shipment synchronisation and carrier coordination policies. However, the number of successful UCC projects led by local authorities in Europe is low, with most of the UCCs failing to achieve financial sustainability after the initial experimental phase, which is often heavily supported by public funds. In order to propose mechanisms that could favour the economic and financial sustainability of UCC systems, this research develops an adaptation of game-theoretic approaches to the problems of responsibility and cost allocation among stakeholders participating in a UCC delivery network. A solution based on the Shapley Value concept is employed to derive cost allocations; applications of the model to a real-world scenario are evaluated. An extensive sensitivity analysis shows that the proposed cost allocation rules can provide alternative arrangements, based on extended responsibility concepts, which can alleviate the burden on local authorities for the set up of UCCs. As such, results provide useful policy and practice implications on how to safeguard UCCs’ viability under different scenarios, including the outsourcing of the last-mile deliveries