Discussion Papers, Department of Business and Management Science, Norwegian School of Economics (NHH)
Cost allocation in collaborative forest transportation
(), Maud Göthe-Lundgren
(), Kurt Jörnsten
() and Mikael Rönnqvist
Abstract: Transportation planning is an important part of the wood
flow chain in forestry. There are often several forest companies operating
in the same region and co-ordination between two or more companies is rare.
However, there is an increasing interest in collaborative planning as the
potential savings are large, often in the range 5-15%. A key question is
how savings should be distributed among the participants. In this paper we
investigate a number of possibilities based on economic models including
Shapley value, the nucleolus, separable and non-separable costs, shadow
prices and volume weights. We also propose a new allocation method based on
finding as equal relative profits as possible among the participants. A
case study including eight forest companies is described and analyzed.
Keywords: Transportation; OR in natural resources; Supply chain management; Economics; Group decisions and negotiations; Linear programming; (follow links to similar papers)
JEL-Codes: L91; Q21; Q23; (follow links to similar papers)
27 pages, November 3, 2006
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