On characterization of the core of lane covering games via dual solutions

The lane covering game (LCG) is a cooperative game where players cooperate to reduce the cost of cycles that cover their required lanes on a network. We discuss the possibilities/impossibilities of a complete characterization of the core via dual solutions in LCGs played among a collection of shippers, each with a number of service require-ments along some lanes, and show that such a complete characterization is possible if each shipper has at most one service requirement

Competitive solutions for cooperating logistics providers

This paper discusses solutions for gain sharing in consortia of logistic providers where joint planning of truckload deliveries enables the reduction of empty kilometres. The highly competitive nature of freight transport markets necessitates solutions that distinguish among the logistics providers based on their characteristics, even in situations with two players only. We introduce desirable properties in these situations and propose a solution that satisfies such properties. By comparing the existing solutions against the introduced properties we demonstrate the advantages of our proposed solution

Collaborative replenishment in the presence of intermediaries

In complex supply chains, downstream buyers would often replenish individually from intermediaries instead of directly dealing with original manufacturers. Although collaborative replenishment from intermediaries might generate benefits, significant cost reductions could be achieved when direct replenishments from manufacturers are considered. This paper constructs a general model to study collaborative replenishment in multi-product chains with alternative sources of supply—i.e., manufacturers and intermediaries. A collaborative organization determines the optimal choices of replenishment sources on behalf of its members to minimize collective costs. We introduce a class of cooperative games associated with these situations and give sufficient conditions for their concavity. We investigate the choice of allocation rule and its effect on supply chain efficiency when buyers strategically participate in the collaborative organization. We prove that the Shapley value coordinates the supply chain, i.e., it makes complete participation the best strategy for buyers even under asymmetric information. This setting is compared with an alternative structure where buyers can only collaborate in source-specific replenishment organizations that purchase all requested products either from intermediaries or manufacturers. Although there are always participation strategies that result in minimum collective cost, it is impossible to find allocation rules for source-specific replenishment organizations that always motivate the buyers to choose such strategies.</p

Global agricultural supply chains under tariff-rate quotas

Supporting information is available online at https://onlinelibrary.wiley.com/doi/10.1111/poms.14054#support-information-section .Copyright © 2023 The Authors. The tariff rate quota (TRQ) is a widely utilized market access instrument in global agricultural trade that allows a predetermined quantity of a product to be imported at a lower tariff rate than the usual rate. This study examines the design and administration of TRQ systems from an operations management perspective and analyzes their impact on market access, fill rates, and revenue for policymakers. We investigate the two most common TRQ administration methods, namely, licensing and first-come, first-served (FCFS) systems. We characterize the Nash equilibria (NE) of importers' strategies and observe how information delays and lead times can result in under-utilization (i.e., imports being less than the quota limit) in licensing and over-utilization (i.e., imports exceeding the quota limit) in FCFS TRQ systems. We introduce a dual TRQ system and demonstrate its superiority over licensing and FCFS systems. We study the effects of stock-keeping options through customs-bonded warehouses and the choice of logistics channels on arrival patterns and fill rates. We conduct a case study of the United Kingdom and the European Union imported beef market using customs data. Our numerical study provides an explanation for the suboptimality of the current TRQ systems and proposes modifications to transform the existing systems. Our findings offer practical directions for agricultural traders to reassess their supply chain strategies by considering the logistical implications of TRQ systems and understanding their competition. This study also urges policymakers to adopt an integrative approach in (re)designing TRQ systems, recognizing the pivotal role of supply chains in global agricultural trade.British Academy of Management; Australian and New Zealand Academy of Managemen

Toward servitization: Optimal design of uptime-guarantee maintenance contracts

Supporting Information available at https://onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1111%2Fpoms.13789&file=poms13789-sup-0001-SuppMat.pdf (730.9 KB).Copyright © 2022 The Authors. This paper analyzes the contracting of maintenance services provided by an original equipment manufacturer (OEM) to an operator for a device. The service provider can exert different levels of maintenance effort during the course of the contract and the device's reliability (uptime) is influenced by these levels. However, the service provider's effort level is noncontractible. Our research seeks to find the optimal structures, as well as parameters, of performance-based maintenance contracts. We single out a unique uptime-guarantee contract structure that contains profit-maximizing contracts in many situations. Complete servitization is the essence of such optimal contract structures. With this contract structure, the service provider simply guarantees 100% uptime and compensates the operator's for any occurred downtime at a higher unit rate than it charges for maintenance services. Our findings show that some of the well-known performance-based contract structures used in practice (e.g., pay-for-performance contracts) can be suboptimal for the OEMs. We incorporate the customer's ability to affect the uptime and show that the optimal contract structures can also coordinate the customer's effort. We demonstrate the advantages and limitations of offering menus of contracts to increase the service provider's expected profits. Finally, through simulations using a sample data set, we find that a contract designed using the key ideas in our paper shows very promising results for practitioners.National Science Foundation of China (grants 72172104 and 72021002)

How ‘ugly’ fruit and vegetables could tackle food waste and solve supermarket supply shortages

This article is republished from The Conversation under a Creative Commons license.The world is facing a significant food waste problem, with up to half of all fruit and vegetables lost somewhere along the agricultural food chain. Globally, around 14% of food produced is lost after harvesting but before it reaches shops and supermarkets

Gain-Sharing in Urban Consolidation Centers

Urban consolidation centers provide the logistical infrastructure for cooperation among less-than-truckload carriers with contiguous destinations. The rising number of initiatives to establish and operate urban consolidation centers and their low success rates signal the need for better mechanisms to manage cooperation in this context. We introduce and study cooperative situations comprising a set of carriers with time sensitive deliveries who can consolidate their cargo to obtain savings. We introduce the class of Dispatch Consolidation (DC) games and search for ways to fairly allocate the obtained savings among the participating carriers. When delivery capacities are not restrictive, i.e. when waiting costs trigger truck dispatches, we show that stable allocations in the core always exist and can, in their entirety, be found by solving a compact linear program. With restrictive capacities, however, the core of a DC game may become empty. We introduce the notion of component-wise core for DC games to preserve stability first and foremost among the carriers whose deliveries are dispatched together in the chosen optimal solutions. The novelty of our approach is to link the stability requirements of an allocation rule with the structure of selected solutions for the underlying optimization problems. We characterize the component-wise cores of DC games, prove their non-emptiness, and suggest proportionally calculated allocations therein. Finally, we discuss a refinement of component-wise core allocations that minimizes envy among the carriers who are dispatched separately

Can "Ugly Veg" Supply Chains Reduce Food Loss?

Appendix A. Supplementary materials: Acrobat PDF file (378KB) available at: https://www.sciencedirect.com/science/article/pii/S0377221723000668?via%3Dihub#sec0023 (Supplementary Data S1. Supplementary Raw Research Data. This is open data under the CC BY license https://creativecommons.org/licenses/by/4.0/.)Copyright © 2023 The Author(s). The tradition of marketing only aesthetically agreeable produce by retailers contributes to a major source of food loss through “ugly veg”, i.e., the produce that does not look “regular”. In this paper, we examine the relations between different tiers of agri-food supply chains to study the impact of marketing ugly veg on different supply chain members and the food loss in the system. We examine and compare scenarios of a centralized supply chain, a traditional supply chain without ugly veg, an ugly veg supply chain with a single retailer offering both regular produce and ugly veg, and a two-retailer supply chain where an auxiliary retailer sells the ugly veg. We characterize the equilibrium decisions in these systems and also provide analytical results and insights on the effectiveness of different supply chain designs based on a comprehensive numerical study. We demonstrate the conditions under which the supply chain can reduce overall food loss. For sufficiently high cost of effort, selling ugly veg through the single retailer reduces food loss. Nonetheless, the grower is generally better off offering the ugly veg to an auxiliary retailer. We show that the ratio of food loss per cultivated land always decreases in the two-retailer supply chain, while the total food loss might increase for sufficiently high cost of effort

Decentralized subcontractor scheduling with divisible jobs

Subcontracting allows manufacturer agents to reduce completion times of their jobs and thus obtain savings. This paper addresses the coordination of decentralized scheduling systems with a single subcontractor and several agents having divisible jobs. Assuming complete information, we design parametric pricing schemes that strongly coordinate this decentralized system, i.e., the agents’ choices of subcontracting intervals always result in efficient schedules. The subcontractor’s revenue under the pricing schemes depends on a single parameter which can be chosen to make the revenue as close to the total savings as required. Also, we give a lower bound on the subcontractor’s revenue for any coordinating pricing scheme. Allowing private information about processing times, we prove that the pivotal mechanism is coordinating, i.e., agents are better off by reporting their true processing times, and by participating in the subcontracting. We show that the subcontractor’s maximum revenue with any coordinating mechanism under private information equals the lower bound of that with coordinating pricing schemes under complete information. Finally, we address the asymmetric case where agents obtain savings at different rates per unit reduction in completion times. We show that coordinating pricing schemes do not always exist in this case