A study on multi-supplier collaborative logistics network with resource sharing under demand uncertainty (Second report, a comparative analysis of shared freight transport and a proposal of cost allocation method)

Abstract

Due to the shortage of truck drivers, the challenge of improving transportation efficiency through collaboration has been receiving increased attention by both government and private sector. We propose a new methodology to introduce a two-stage stochastic program and cooperative game theory to design a transport network that incorporates truck sharing and Less-Than-Truckload (LTL) shipping under demand uncertainty. The method is focused on the number of suppliers’ own trucks in the first stage, and the flow of parts and trucks from suppliers to manufacturers and in the second stage. We analyze the value of collaboration on three different sets of demand scenarios with two manufacturers and four collaborating suppliers. Our analysis suggests that LTL shipping can reduce the number of trucks more than FTL (Full TruckLoad) shipping when the demand is expected to increase. It is also observed that LTL shipping can be more beneficial than 3PL even for long-distance transportation and reduces the total cost about twice as much as FTL shipping does, which is more than 5% of that of the non-collaborative scenario. Further, LTL shipping cost is allocated to each supplier according to the Shapley value. The results show that LTL shipping is a more cost-effective transportation mode for suppliers with high freight volumes and trucks, and all suppliers acquire cost reduction at almost the same rate.

Keywords

• logistics network
• resource sharing
• two-stage stochastic program
• collaborative logistics