Cooperative Game-Theoretic Features of Cost Sharing in Location-Routing
25 Pages Posted: 25 Oct 2018
Date Written: September 24, 2018
This article studies several variants of the location-routing problem using a cooperative game-theoretic framework. The authors derive characteristics in terms of subadditivity, convexity, and non-emptiness of the core. Moreover, for some of the game variants, it is shown that for facility opening costs substantially larger than the costs associated with routing, the core is always non-empty. The theoretical results are supported by numerical experiments aimed at illustrating the properties and deriving insights. Among others, it is observed that, while in general it is not possible to guarantee core allocations, in a huge majority of cases the core is non-empty.
Keywords: Collaborative logistics, Location-routing, Cooperative game theory, Cost allocation
JEL Classification: C00, C71
Suggested Citation: Suggested Citation