An online cost allocation model for horizontal supply chains

Emerging technologies in cargo shipping delivery have provided a way to facilitate horizontal cooperation in the transportation of goods to reduce the shipping cost of the cooperating firms, but an open question in this cooperation is how to allocate the costs fairly among the participants. In this paper, the authors focus on routing in real time a fleet of capacitated vehicles to satisfy requests submitted by a set of customers with some of the requests unknown while assigning the service cost fairly among the requested customers. The authors propose a Hybrid Proportional Online Cost-Sharing (HPOCS) mechanism to tackle the cost-sharing problem and analyze its performance using simulation instances. Although HPOCS does satisfy the desirable properties, namely online fairness, budget balance, immediate response, individual rationality and ex-post incentive compatibility, it has a few drawbacks in certain scenarios. Therefore, the authors make two extensions to HPOCS: 1) the authors introduce the idea of discounts to encourage customers to request in advance to facilitate efficient vehicle routing; 2) the authors incorporate periodical re-optimization within the dynamic vehicle routing framework. Experimental analysis are made in both extensions to see the tradeoff between the performance and the loss of certain desirable properties.


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  • Accession Number: 01764654
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 17 2020 3:13PM