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Cost allocation methods in cooperative transportation planning
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0002-6006-3279
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Transportation, together with transportation planning for goods, provides good conditions for economic growth and is a natural part of modern society. However, transportation has negative side effects, including emissions and traffic congestion. A freight forwarder may consolidate shippers’ goods in order to reduce some of the negative side effects, thus reducing emissions and/or congestion as well as operational costs. The negative side effects as well as operational costs can be further reduced if a number of freight forwarders cooperate and consolidate their collective goods flows. Consolidation refers to the process of merging a number of the freight forwarders’ shipments of goods into a single shipment. In this case, the freight forwarders are cooperating with competitors (the other freight forwarders).

Fair cost allocations are important for establishing and maintaining cost-efficient cooperation among competing stakeholders. Cooperative game theory defines a number of criteria for fair cost allocations and the problem associated with the decision process for allocating costs is referred to as the cost allocation problem. In this thesis, cooperative game theory is used as an academic tool to study cooperation among stakeholders in two transportation planning applications, namely 1) the distribution of goods bound for urban areas and 2) the transportation of wood between harvest areas and industries.

In transportation planning application 1, there is a cooperation among a number of freight forwarders and a municipality. Freight forwarders’ goods bound for an urban area are consolidated at a facility located just outside the urban area. In this thesis, operational costs for distributing the goods are assessed by solving vehicle routing problems. Common methods from cooperative game theory are used for allocating the operational costs among the freight forwarders and the municipality. In transportation planning application 2, forest companies cooperate in terms of the supply and transportation of common resources, or more specifically, different types of wood. Each forest company has harvest areas and industries to which the wood is transported. The resources may be bartered, that is, the forest companies may transport wood from each other’s harvest areas.

In the cooperative game theory literature, the stakeholders are often treated equally in the context of transportation planning. However, there seems to be a lack of studies on cooperations where at least one stakeholder differs from the other stakeholders in some fundamental way, for instance, as an initiator or an enabler of the cooperation. Such cooperations are considered in this thesis. The municipality and one of the forest companies are considered to be the initiators in their respective applications.

Five papers are appended to this thesis and the overall aim is to contribute to the research into cooperative transportation planning by using concepts from cooperative game theory to develop methods for allocating costs among cooperating stakeholders. The purpose of this thesis is to provide decision support for planners in the decisionmaking process of transportation planning to establish cost-efficient and stable cooperations.

Some of the main outcomes of this thesis are viable and practical methods that could be used in real-life situations to allocate costs among cooperating stakeholders, as well as support for decisionmakers who are concerned with transportation planning. This is done by demonstrating the potential of cooperation, such as cost reduction, and by suggesting how costs can be allocated fairly in the transportation planning applications considered. Lastly, a contribution to cooperative game theory is provided; the introduction of a development of the equal profit method for allocating costs. The proposed version is the equal profit method with lexicography, which, in contrast to the former, guarantees to yield at most one solution to any cost allocation problem. Lexicography is used to rank potential cost allocations and the unambiguously best cost allocation is chosen.  

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2018. , p. 59
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1911
National Category
Transport Systems and Logistics
Identifiers
URN: urn:nbn:se:liu:diva-153338DOI: 10.3384/diss.diva-153338ISBN: 9789176853504 (print)OAI: oai:DiVA.org:liu-153338DiVA, id: diva2:1270565
Public defence
2019-01-18, K3, Kåkenhus, Campus Norrköping, Norrköping, 13:15
Opponent
Supervisors
Available from: 2018-12-13 Created: 2018-12-13 Last updated: 2018-12-14Bibliographically approved
List of papers
1. Consolidation in Urban Freight Transportation - Cost Allocation Models
Open this publication in new window or tab >>Consolidation in Urban Freight Transportation - Cost Allocation Models
2018 (English)In: Asia-Pacific journal of operational research, ISSN 0217-5959, E-ISSN 1793-7019, Vol. 35, no 4, article id 1850023Article in journal (Refereed) Published
Abstract [en]

In this paper, the focus is on the role of the municipality, as an enabler of a collaboration between freight forwarders and the municipality in which the consolidation of goods is considered as a means for goods flow improvement in urban freight transportation. We present a cost allocation model that is based on solution concepts from cooperative game theory, for allocating the operational costs associated with the collaboration. It is assumed that the municipality is willing to carry some cost to ensure a stable collaboration for the potential benefits received, e.g., reduced traffic congestion in the city. The model is applied to some illustrative examples, and the cost allocation results are discussed. It is shown that the role of the municipality may be decisive in achieving a stable collaboration between the freight forwarders, and further that the municipality does not necessarily need to contribute to covering the costs.

Place, publisher, year, edition, pages
WORLD SCIENTIFIC PUBL CO PTE LTD, 2018
Keywords
Collaboration; cost allocation; city distribution center; municipality
National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:liu:diva-150486 (URN)10.1142/S0217595918500239 (DOI)000441395200005 ()
Note

Funding Agencies|Swedish Energy Agency; VINNOVA

Available from: 2018-08-24 Created: 2018-08-24 Last updated: 2018-12-13
2. A note on the nonuniqueness of the Equal Profit Method
Open this publication in new window or tab >>A note on the nonuniqueness of the Equal Profit Method
2017 (English)In: Applied Mathematics and Computation, ISSN 0096-3003, E-ISSN 1873-5649, Vol. 308, p. 84-89Article in journal (Refereed) Published
Abstract [en]

When a set of players cooperate, they need to decide how the collective cost should be allocated amongst them. Cooperative game theory provides several methods or solution concepts, that can be used as a tool for cost allocation. In this note, we consider a specific solution concept called the Equal Profit Method (EPM). In some cases, a solution to the EPM is any one of infinitely many solutions. That is, it is not always unique. This leads to a lack of clarity in the characterization of the solutions obtained by the EPM. We present a modified version of the EPM, which unlike its precursor ensures a unique solution. In order to illustrate the differences, we present some numerical examples and comparisons between the two concepts.

Keywords
Game Theory, Unique Solution, Solution Concept, EPM, Linear Programming, Lexicography
National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:liu:diva-121557 (URN)10.1016/j.amc.2017.03.018 (DOI)000399591500007 ()
Note

Funding agencies: Swedish Energy Agency

Available from: 2015-09-24 Created: 2015-09-24 Last updated: 2018-12-13
3. Incitements for transportation collaboration by cost allocation
Open this publication in new window or tab >>Incitements for transportation collaboration by cost allocation
Show others...
2018 (English)In: Central European Journal of Operations Research, ISSN 1435-246X, E-ISSN 1613-9178Article in journal (Refereed) Epub ahead of print
Abstract [en]

In this paper, we focus on how cost allocation can be used as a means to create incentives for collaboration among companies, with the aim of reducing the total transportation cost. The collaboration is assumed to be preceded by a simultaneous invitation of the companies to collaborate. We make use of concepts from cooperative game theory, including the Shapley value, the Nucleolus and the EPM, and develop specific cost allocation mechanisms aiming to achieve large collaborations among many companies. The cost allocation mechanisms are tested on a case study that involves transportation planning activities. Although the case study is from a specific transportation sector, the findings in this paper can be adapted to collaborations in other types of transportation planning activities. Two of the cost allocation mechanisms ensure that any sequence of companies joining the collaboration represents a complete monotonic path, that is, any sequence of collaborating companies is such that the sequences of allocated costs are non-increasing for all companies.

Place, publisher, year, edition, pages
Springer, 2018
Keywords
Collaboration, Transportation planning, Monotonic Path, Cost Allocation, Cooperative game theory
National Category
Transport Systems and Logistics
Identifiers
urn:nbn:se:liu:diva-121558 (URN)10.1007/s10100-018-0530-2 (DOI)
Funder
Swedish Energy AgencyVINNOVA
Available from: 2015-09-24 Created: 2015-09-24 Last updated: 2018-12-13Bibliographically approved

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