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Allocation of Transportation Cost & CO2 Emission in Pooled Supply Chains Using Cooperative Game Theory

Author

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  • Xiaozhou Xu

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Shenle Pan

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Eric Ballot

    (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

The sustainability of supply chain,both economical and ecological, has attracted intensive attentions of academic and industry. It is proven in former works that supply chain pooling given by horizontal cooperation among several independent supply chains create a new common supply chain network that could reduce the costs and the transport CO2 emissions. In this regard, this paper introduces a scheme to share in a fairly manner the savings. After a summary of the concept of pooled-supply-networks optimization and CO2 emission model, we use cooperative game theory as the cooperative mechanism for the implementation of the horizontal pooling. Since we proved the related pooling game to be super-additive, a fair and stable allocation of common gain in transportation cost and CO2 emission is calculated by Shapley Value concept. Through a case study, the results show that supply chains pooling can result in reductions of both transportation cost and carbon emissions, and that the increase of carbon-tax rate gives enterprises more incentives for the implementation of such pooling scheme.

Suggested Citation

  • Xiaozhou Xu & Shenle Pan & Eric Ballot, 2012. "Allocation of Transportation Cost & CO2 Emission in Pooled Supply Chains Using Cooperative Game Theory," Post-Print hal-00733491, HAL.
    • Handle: RePEc:hal:journl:hal-00733491
    Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-00733491v1
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    References listed on IDEAS

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    1. Cruijssen, F. & Salomon, M., 2004. "Empirical Study : Order Sharing Between Transportation Companies may Result in Cost Reductions Between 5 to 15 Percent," Discussion Paper 2004-80, Tilburg University, Center for Economic Research.
    2. Béal, Sylvain & Durieu, Jacques & Solal, Philippe, 2008. "Farsighted coalitional stability in TU-games," Mathematical Social Sciences, Elsevier, vol. 56(3), pages 303-313, November.
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    4. Cruijssen, F. & Salomon, M., 2004. "Empirical Study : Order Sharing Between Transportation Companies may Result in Cost Reductions Between 5 to 15 Percent," Other publications TiSEM 308c6567-826b-4471-9105-9, Tilburg University, School of Economics and Management.
    5. Cruijssen, Frans & Cools, Martine & Dullaert, Wout, 2007. "Horizontal cooperation in logistics: Opportunities and impediments," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(2), pages 129-142, March.
    6. McKinnon, A.C. & Piecyk, M.I., 2009. "Measurement of CO2 emissions from road freight transport: A review of UK experience," Energy Policy, Elsevier, vol. 37(10), pages 3733-3742, October.
    7. Kannai, Yakar, 1992. "The core and balancedness," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 12, pages 355-395, Elsevier.
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    Cited by:

    1. Kellner, Florian, 2016. "Allocating greenhouse gas emissions to shipments in road freight transportation: Suggestions for a global carbon accounting standard," Energy Policy, Elsevier, vol. 98(C), pages 565-575.
    2. R. Jothi Basu & Nachiappan Subramanian & Angappa Gunasekaran & P. L. K. Palaniappan, 2017. "Influence of non-price and environmental sustainability factors on truckload procurement process," Annals of Operations Research, Springer, vol. 250(2), pages 363-388, March.

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