Cooperative supply game and its revenue allocation method considering location of transportation hub

Purpose

This paper aims to study the establishment of cooperative supply game model considering transportation hub location, and design the profit allocation rule of the cooperative supply coalition.

Design/methodology/approach

Based on the economic lost-sizing (ELS) game model and considering the location of transportation hub and the topology design of basic traffic network, we build a supply game model to maximize the profit of cooperative supply coalition. Based on the principle of proportion and the method of process allocation, we suppose the procedural proportional solution of the supplier cooperative supply game.

Findings

Through numerical examples, the validity and applicability of the proposed model and the procedural proportional solution were verified by comparing the procedural proportional solution with the weighted Shapley value, the equal division solution and the proportional rule.

Originality/value

This paper constructs a feasible mixed integer programming model for cooperative supply game. We also provide the algorithm of the allocation rule of cooperative supply game and the property analysis of the allocation rule.