Allocating Cost to Freight Carriers in Horizontal Logistic Collaborative Transportation Planning on Leading Company Perspective

Abstract

Interest has been raised by the recent identification of cooperation cost through collaborative planning in horizontal logistics operations. Even though cooperation cost can be realized, one key question exists: how should cooperation cost be divided among a group of collaborating companies. In this article, the question is studied in a centralized framework context. We divide the participants into two groups, leading companies (LC) and nonleading companies (NLC), and propose five fair distribution rules from the perspective of leading companies. According to these distribution principles, we developed an allocation method called Leading-idealism Cost Allocation Model (LiCAM) and compared it with three existing classic allocation mechanisms which violate some of these criteria are discussed. Computational results show that our method has acceptable calculation time, stability, consistency, and monotony. Our model can fully reflect the value as a leading company which is consistent with the actual practice requirements. We also illustrate the value and operability of our model by discussing the number of leading companies and the size of the alliance.