Multi-objective optimization framework for the integration of individual partner interests in a collaborative location-inventory model
(2019) INFORMS TLS 2019 WORKSHOP — Location: Vienne (15.July.2019)
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Hacardiaux, Thomas 
- et. al.
- Abstract
- Horizontal cooperation in logistics has gathered momentum in the last few decades as a way to reach economic as well as environmental benefits. In the literature, these benefits are most often assessed by aggregating the demands, and optimizing the supply chain of the partnership as a whole. However, this method ignores the individual preferences of the participating companies and forces them to agree on a unique coalition objective. As companies may have different, potentially conflicting, objectives, they might have incentives to diverge from the proposed solution to improve their individual outcome. In this paper, we integrate the individual partners' interests in a cooperative location-inventory model, by allowing partners to specify their preferences regarding the reduction of their logistics costs versus the reduction of their CO2 emissions. In this way, we ensure acceptance of the solution by all stakeholders and guarantee the durability of the collaboration. We propose different approaches to find a fair and efficient solution to the coalition and we assess the respective advantages and drawbacks of each of them. From numerical experiments, we infer valuable managerial insights varying the individual cost-emissions preferences and the characteristics of the partners.
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Citations
Hacardiaux, T., Tancrez, J.-S., Defryn Christof, Verdonck Lotte, & et al. (2019). Multi-objective optimization framework for the integration of individual partner interests in a collaborative location-inventory model. INFORMS TLS 2019 WORKSHOP, Vienne. https://hdl.handle.net/2078.5/94696