Profit maximizing coalitions with shared capacities in distribution networks

We study the distribution network structure of multiple firms in context demand sensitivity to market offers. The problem consists determining profitability horizontal collaboration between a collaborative schema. It considers case set regional centers (DCs) where each DC is initially dedicated solely one firm’s activities and studies when it beneficial that owners collaborate through sharing their storage-throughput capacity. Such strategic decisions are made order improve capabilities terms response time cost-efficiency compared stand-alone situation. modeled as coalition formation game cooperative framework, we propose with profit maximization. Three mechanisms tested: egalitarian allocation, proportional Shapley value. decision conditions for given firm analytically derived according method considered used enhance solution approach. Our numerical results clearly highlight impact this innovative opportunity on firms’ performance cost savings revenue increases. An observed behavior several sub-coalitions prevails over grand coalition, different methods can lead sub-coalitions. also provide managerial insights appropriate size various business instances tested, key drivers foster among firms.