An Analysis of Stability of Retailers’ Joint Purchasing and Transportation Coalition for Deteriorating Items

Abstract

Abstract:

For multiple retailers selling deteriorating items, a model about order quantity and stability of joint purchasing and transportation coalition is established. First of all, the optimal order quantity of the coalition is obtained. It is found that joint purchase and cooperative transport do not necessarily reduce the total operating costs for the retailers. Then, the conditions that retailers can reduce the total operating costs by joint purchase and cooperative transport are obtained. A cost allocation rule is provided by which each retailer’s marginal cost will keep the stability of the grand coalition. Finally, three common cost allocation rules are compared through a numerical example, and it is found that the larger retailers in coalition become in number, the more advantage marginal cost allocation rule will have.

Key words: cooperative coalition, deteriorating items, order quantity, stability

XIAO Dan1, LIU Fang1, LU Dalin1, SHI Xinxiang1, ZHOU Yongwu 2. An Analysis of Stability of Retailers’ Joint Purchasing and Transportation Coalition for Deteriorating Items[J]. Industrial Engineering Journal .

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