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How flow can you go?: a logistic management game and profit sharing

Published: 14 May 2010 Publication History

Abstract

The management game "How flow can you go?" is developed to convince decision makers of international logistic providers that their current planning methods of their transportation flows may be considerably improved using OR-techniques. In fact, we have tested the game with several planners of several logistic providers and it turns out that the mathematical tool included in the management game outperforms the planners' solutions, on average, by 10%. Next, we show that cooperation among different logistic providers or between individual business units of one provider may increase profit even more. Since a fair allocation of these extra profits is essential for a successful cooperation, we use cooperative game theory methodology. More precisely, we propose the Shapley value of a cooperative game that arises from the management game as a fair allocation. Finally, the management game is illustrated by means of a case of an international logistic provider.

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    BQGT '10: Proceedings of the Behavioral and Quantitative Game Theory: Conference on Future Directions
    May 2010
    155 pages
    ISBN:9781605589190
    DOI:10.1145/1807406
    Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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    • Eller College of Management

    In-Cooperation

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    Association for Computing Machinery

    New York, NY, United States

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    Published: 14 May 2010

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