IDEAS home Printed from https://ideas.repec.org/a/sae/sagope/v12y2022i2p21582440221094590.html
   My bibliography  Save this article

A Profit Allocation Mechanism for Customer-to-Manufacturer Platform in e-Commercial Business

Author

Listed:
  • Bo Dai
  • Fenfen Li
  • Yunchong Liu

Abstract

In this paper, the customer to manufacturer (C2M) platform in e-commercial business which connects the customers and the manufacturers is studied. The platform is organized in a centralized collaboration framework where an e-commercial company and multiple manufacturers form a collaborative alliance to satisfy the product orders of multiple customers and maximize a total profit of the alliance. The key issue of the C2M platform is to seek a fair allocation of the profit among the manufacturers. A profit allocation mechanism is proposed for the platform that can assure the stability of the alliance and the sustainability of the platform. The mechanism is based on core allocation and considers each manufacturer’s contribution in fulfilling orders. The effectiveness of the mechanism is evaluated by numerical experiments on 60 instances generated from real data of Alibaba. The experiment results display that the participation of more manufacturers in the C2M platform is profitable. The proposed mechanism can create a profit allocation that keeps in the core in 31 of 60 instances and produce a feasible profit allocation in other 29 instances, which is more reasonable than the current mechanism of C2M platform and easier applied in practice.

Suggested Citation

  • Bo Dai & Fenfen Li & Yunchong Liu, 2022. "A Profit Allocation Mechanism for Customer-to-Manufacturer Platform in e-Commercial Business," SAGE Open, , vol. 12(2), pages 21582440221, May.
    • Handle: RePEc:sae:sagope:v:12:y:2022:i:2:p:21582440221094590
    DOI: 10.1177/21582440221094590
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/21582440221094590
    Download Restriction: no
    File URL: https://libkey.io/10.1177/21582440221094590?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Santiago Gallino & Antonio Moreno, 2014. "Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information," Management Science, INFORMS, vol. 60(6), pages 1434-1451, June.
    2. M A Krajewska & H Kopfer & G Laporte & S Ropke & G Zaccour, 2008. "Horizontal cooperation among freight carriers: request allocation and profit sharing," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(11), pages 1483-1491, November.
    3. Yaoguang Zhong & Fangfang Guo & Zhiqiang Wang & Huajun Tang, 2019. "Coordination Analysis of Revenue Sharing in E-Commerce Logistics Service Supply Chain With Cooperative Distribution," SAGE Open, , vol. 9(3), pages 21582440198, August.
    4. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
    5. Chenchen Yang & Junfeng Dong & Jingjing Hao, 2019. "Cooperation Contracts Between Small and Major Scenic Spots in Peak Seasons," SAGE Open, , vol. 9(3), pages 21582440198, July.
    6. Luo, Hao & Yang, Xuan & Kong, Xiang T.R., 2019. "A synchronized production-warehouse management solution for reengineering the online-offline integrated order fulfillment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 211-230.
    7. Libin Deng & Zhenyu Liu, 2009. "Research on cost allocation for interorganisational systems," International Journal of Networking and Virtual Organisations, Inderscience Enterprises Ltd, vol. 6(4), pages 344-355.
    8. Dai, B. & Chen, H.X. & Li, Y.A. & Zhang, Y.D. & Wang, X.Q. & Deng, Y.M., 2021. "Inventory replenishment planning of a distribution system with storage capacity constraints and multi-channel order fulfilment," Omega, Elsevier, vol. 102(C).
    9. Bo Dai & Haoxun Chen, 2015. "Proportional egalitarian core solution for profit allocation games with an application to collaborative transportation planning," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 9(1), pages 53-76.
    10. Gansterer, Margaretha & Hartl, Richard F., 2018. "Collaborative vehicle routing: A survey," European Journal of Operational Research, Elsevier, vol. 268(1), pages 1-12.
    11. Mark R. Frascatore & Farzad Mahmoodi, 2011. "Cost-sharing contracts and efficiency in a two-stage supply chain," International Journal of Integrated Supply Management, Inderscience Enterprises Ltd, vol. 6(1), pages 3-19.
    12. Wen Chen & Qiang Zhang & Mingzhe Wang, 2007. "Profit allocation scheme among partners in virtual enterprises based on Shapley values with fuzzy payoffs," International Journal of Logistics Economics and Globalisation, Inderscience Enterprises Ltd, vol. 1(1), pages 49-62.
    13. Pallant, Jessica & Sands, Sean & Karpen, Ingo, 2020. "Product customization: A profile of consumer demand," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    14. Haifeng Yao & Xiaoxi Ran, 2019. "Profit allocation in agricultural supply chain considering risk factors," International Journal of Manufacturing Technology and Management, Inderscience Enterprises Ltd, vol. 33(3/4), pages 176-188.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yun, Jeewoo & Lee, Don & Cottingham, Michael & Hyun, Hyowon, 2023. "New generation commerce: The rise of live commerce (L-commerce)," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).
    2. Park, JungKun & Hong, EunPyo & Park, Yun-na, 2023. "Toward a new business model of retail industry: The role of brand experience and brand authenticity," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).
    3. Lina Ma & Wanying Zhao & Longzhu Dong & Yushen Du, 2023. "Platforms Competition: An Ecosystem-View Analysis Based on Evolutionary Game Theory," SAGE Open, , vol. 13(4), pages 21582440231, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gansterer, Margaretha & Hartl, Richard F. & Sörensen, Kenneth, 2020. "Pushing frontiers in auction-based transport collaborations," Omega, Elsevier, vol. 94(C).
    2. Nassim Mrabti & Nadia Hamani & Laurent Delahoche, 2022. "A Comprehensive Literature Review on Sustainable Horizontal Collaboration," Sustainability, MDPI, vol. 14(18), pages 1-38, September.
    3. Arslan, Okan & Archetti, Claudia & Jabali, Ola & Laporte, Gilbert & Grazia Speranza, Maria, 2020. "Minimum cost network design in strategic alliances," Omega, Elsevier, vol. 96(C).
    4. Guajardo, Mario & Rönnqvist, Mikael & Flisberg, Patrik & Frisk, Mikael, 2018. "Collaborative transportation with overlapping coalitions," European Journal of Operational Research, Elsevier, vol. 271(1), pages 238-249.
    5. Santos, Maria João & Curcio, Eduardo & Amorim, Pedro & Carvalho, Margarida & Marques, Alexandra, 2021. "A bilevel approach for the collaborative transportation planning problem," International Journal of Production Economics, Elsevier, vol. 233(C).
    6. Frans Cruijssen & Ilja van Beest & Goos Kant, 2023. "A Human Behaviour Perspective on Horizontal Collaboration to Reduce the Climate Impact of Logistics," Sustainability, MDPI, vol. 15(23), pages 1-15, November.
    7. Mathijs van Zon & Remy Spliet & Wilco van den Heuvel, 2021. "The Joint Network Vehicle Routing Game," Transportation Science, INFORMS, vol. 55(1), pages 179-195, 1-2.
    8. Mashalah, Heider Al & Hassini, Elkafi & Gunasekaran, Angappa & Bhatt (Mishra), Deepa, 2022. "The impact of digital transformation on supply chains through e-commerce: Literature review and a conceptual framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    9. Alikhani, Reza & Eskandarpour, Majid & Jahani, Hamed, 2023. "Collaborative distribution network design with surging demand and facility disruptions," International Journal of Production Economics, Elsevier, vol. 262(C).
    10. Yang, Fei & Dai, Ying & Ma, Zu-Jun, 2020. "A cooperative rich vehicle routing problem in the last-mile logistics industry in rural areas," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    11. Thyago Celso Cavalcante Nepomuceno & Késsia Thais Cavalcanti Nepomuceno & Thiago Poleto & Victor Diogho Heuer de Carvalho & Ana Paula Cabral Seixas Costa, 2022. "When Penalty Fails: Modeling Contractual Misincentives With Evidence From Portugal ITO Agreements," SAGE Open, , vol. 12(4), pages 21582440221, December.
    12. Berling, Peter & Johansson, Lina & Marklund, Johan, 2023. "Controlling inventories in omni/multi-channel distribution systems with variable customer order-sizes," Omega, Elsevier, vol. 114(C).
    13. Paul, Joydeep & Agatz, Niels & Spliet, Remy & Koster, René De, 2019. "Shared Capacity Routing Problem − An omni-channel retail study," European Journal of Operational Research, Elsevier, vol. 273(2), pages 731-739.
    14. Gansterer, Margaretha & Hartl, Richard F. & Savelsbergh, Martin, 2020. "The value of information in auction-based carrier collaborations," International Journal of Production Economics, Elsevier, vol. 221(C).
    15. van Zon, M. & Spliet, R. & van den Heuvel, W., 2021. "The effect of algorithm capabilities on cooperative games," Econometric Institute Research Papers EI2021-02, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    16. 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.
    17. Berentsen, Aleksander & Huber, Samuel & Marchesiani, Alessandro, 2016. "The societal benefit of a financial transaction tax," European Economic Review, Elsevier, vol. 89(C), pages 303-323.
    18. Yanwei Chen & Xiaojun Liu & Kaiqing Huang & Huajun Tang, 2022. "Pricing and Service Effort Decisions of Book Dual-Channel Supply Chains with Showrooming Effect Based on Cost-Sharing Contracts," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    19. Neslin, Scott A., 2022. "The omnichannel continuum: Integrating online and offline channels along the customer journey," Journal of Retailing, Elsevier, vol. 98(1), pages 111-132.
    20. Mario Guajardo & Kurt Jörnsten & Mikael Rönnqvist, 2016. "Constructive and blocking power in collaborative transportation," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(1), pages 25-50, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:sagope:v:12:y:2022:i:2:p:21582440221094590. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.