A COALITION FORMATION FRAMEWORK FOR HORIZONTAL SUPPLY CHAIN COLLABORATION

Abstract

Background: Horizontal logistics collaboration offers a great opportunity for companies to reduce their distribution costs and therefore improve the efficiency of the supply chain. By forming a coalition, companies have the potential to become more profitable. However, the selection of a coalition structure is a difficult task for decision makers. The decision maker needs to identify and choose the best possible partner(s) in order to carry out a joint plan with respect to many criteria. The purpose of this paper is to propose a coalition formation framework for horizontal supply chain collaboration. Methods: To identify and choose the best possible partner(s) in order to carry out a joint plan with respect to many criteria, the methodology of decision-making in a multi-criteria group was used; it was implemented by combining the analytical hierarchy process, the Choquet integral and the Shapley value. In order to demonstrate the validity of the proposed method, numerical examples related to different coalition structures are presented. They demonstrate both the advantages and the feasibility of the proposed framework. Results: The simulation study generated several insights that may help companies to make better partner choices during the design phase of the coalition. The paper solves a coalition-formation problem for cooperative replenishment with multiple firms. Given the significant savings that may be realized thanks to horizontal collaboration, the main interest of the potential collaborating firms is to figure out how the collaborating group should be formed. In order to reach a cooperative decision that fulfills the requirements of individual firms, a multiple criteria hesitant fuzzy decision-making method that uses Shapley value-based E-VIKOR and TOPSIS methods was developed. The proposed procedures not only perfect the existing methods of MCDM with hesitant fuzzy information, but also develop a new direction of hesitant fuzzy theory in the practical decision-making problem of coalition formation in horizontal cooperation. Conclusions: Horizontal cooperation may create synergy effects for cooperating entrepreneurs. Logistics is a good area to analyze the possibility of horizontal cooperation because of the fairly clear set of variables that describe it. The selection of appropriate coalition partners is a very difficult task because it is necessary to comply with a multi-partner collaborative environment. There are many parameters that have a significant role, so the decision-maker has to take them all into consideration. MCDM methods can simplify the decision-making process for coalition formation, but there are also certain other considerations that should be taken into account.