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Cost allocation in the establishment of a collaborative transportation agreement—an application in the furniture industry

Author

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  • J-F Audy

    (Université Laval
    CIRRELT and FORAC Research Consortium)

  • S D’Amours

    (Université Laval
    CIRRELT and FORAC Research Consortium)

  • L-M Rousseau

    (École Polytechnique de Montréal
    CIRRELT and FORAC Research Consortium)

Abstract

Transportation is an important part of the Canadian furniture industry supply chain. Even though there are often several manufacturers shipping in the same market region, coordination between two or more manufacturers is rare. Recently, important potential cost savings and delivery time reduction have been identified through transportation collaboration. In this paper we propose and test on a case study involving four furniture companies, a logistics scenario that allows transportation collaboration. Moreover, we address the key issue of cost savings sharing, especially when heterogeneous requirements by each collaborating company impact the cost-savings. To do so, we propose a new cost allocation method that is validated through a case study. Sensibility analysis and details about the actual outcome of the case study complete the discussion.

Suggested Citation

  • J-F Audy & S D’Amours & L-M Rousseau, 2011. "Cost allocation in the establishment of a collaborative transportation agreement—an application in the furniture industry," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 960-970, June.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:6:d:10.1057_jors.2010.53
    DOI: 10.1057/jors.2010.53
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    References listed on IDEAS

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    Cited by:

    1. Miroslav Prokić, 2023. "The applicability of Cooperative Game Theory in Rail Freight Corridors Framework," Shaping Post-COVID World – Challenges for Economic Theory and Policy, in: Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.),Shaping Post-COVID World – Challenges for Economic Theory and Policy, chapter 14, pages 305-320, Faculty of Economics and Business, University of Belgrade.
    2. Aleksandra Praščević & Miomir Jakšić & Mihail Arandarenko & Dejan Trifunović & Milutin Ješić (ed.), 2023. "Shaping Post-COVID World – Challenges for Economic Theory and Policy," Shaping Post-COVID World – Challenges for Economic Theory and Policy, Faculty of Economics and Business, University of Belgrade, number 23, October –.
    3. Stehbeck, Florian, 2019. "Designing and Scheduling Cost-Efficient Tours by Using the Concept of Truck Platooning," Junior Management Science (JUMS), Junior Management Science e. V., vol. 4(4), pages 566-634.
    4. Mauricio Varas & Franco Basso & Paul Bosch & Juan Pablo Contreras & Raúl Pezoa, 2022. "A horizontal collaborative approach for planning the wine grape harvesting," Operational Research, Springer, vol. 22(5), pages 4965-4998, November.
    5. repec:beo:swcetp:23-14 is not listed on IDEAS
    6. Arroyo, Federico, 2024. "Cost Allocation in Vehicle Routing Problems with Time Windows," Junior Management Science (JUMS), Junior Management Science e. V., vol. 9(1), pages 1241-1268.

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