Profit aAlocation Problems for Fourth Party Logistics Supply Chain Coalition Based on Game Theory Approach

Abstract

Aim/purpose - The paper analyses how game theory can be exploited to provide the implementation of profit allocations among the members of the fourth party logistics supply chain coalition system. Design/methodology/approach - The study compares four allocation rules from cooperative game theory in order to explore fair and reasonable sharing of revenue among the partners in the venture. Findings - As a result, more practical situations can be modelled and more supply chain efficiency can be obtained throughout the several steps carried out by decision makers. Our computational analysis establishes that the proposed methods are computationally efficient and can be implemented to solve real-life problems. Research implications/limitations - Our business process simulation of the 4PL supply chain coalition including a simulation of the profit allocation concept allowed us to develop a broad understanding of the management process of the 4PL supply chain coalition approach. Originality/value/contribution - A comparison of the different methods based on game theory provided an opportunity for reaching the prefect collaboration. These views enrich our understanding of the 4PL supply chain coalition and help us to implement an innovative development for the sector.(original abstract)

Keywords

• Logistics
• Game theory
• Capital allocation
• Enterprises cooperation
• Supply chain