Optimized Shapley value cost allocation model for carriers’ collaboration in road haulage transportation

Harrison Obiora Amuji; Donatus Eberechukwu Onwuegbuchunam; Innocent Chuka Ogwude; Kenneth Okechukwu Okeke; John Folayan Ojutalayo; Christy Chidiebere Nwachi; Mustapha Muhammad Abdulmalik

doi:10.14254/jsdtl.2024.9-1.2

Harrison Obiora Amuji ⁽¹⁾ , Donatus Eberechukwu Onwuegbuchunam ⁽²⁾ , Innocent Chuka Ogwude ⁽³⁾ , Kenneth Okechukwu Okeke ⁽⁴⁾ , John Folayan Ojutalayo ⁽⁵⁾ , Christy Chidiebere Nwachi ⁽⁶⁾ , Mustapha Muhammad Abdulmalik ⁽⁷⁾

(1) Department of Statistics, Federal University of Technology Owerri, Nigeria , Nigeria

(2) Department of Maritime Technology and Logistics, Federal University of Technology Owerri , Nigeria

(3) Department of Logistics & Transport Technology, Federal University of Technology Owerri, Nigeria , Nigeria

(4) Department of Maritime Technology and Logistics, Federal University of Technology Owerri, Nigeria , Nigeria

(5) Department of Nautical Science, Federal College of Fisheries and Marine Technology, Lagos, Nigeria , Nigeria

(6) Department of Urban and Regional Planning, Federal University of Technology Owerri, Nigeria , Nigeria

(7) Department of Transport Management, Ibrahim Badamasi Babangida University Lapai, Nigeria , Nigeria

https://doi.org/10.14254/jsdtl.2024.9-1.2

Issue
Vol. 9 No. 1 (2024)

Keywords:

Shapley value, mixed-integer programming, haulage transportation carriers, transport distribution chain, cost allocation

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Abstract

Transportation carriers can achieve significant profit or cost savings if they collaborate rather than engage in wasteful competition among themselves. However, the challenge in cooperative game theory is finding the optimal cost allocation methods to support pecuniary expectations of coalition members. In this paper, we determine cost allocation model that supports horizontal collaboration among transportation carriers involved in downstream distribution of packaged cement from shipper’s processing plant to customer locations in selected states in Nigeria. The study focuses on the relationship between the shipper and haulage carriers that service the transport needs of its geographically distributed customers. A cost allocation mechanism based on game theory is proposed to implement win-win collaboration among the carriers. We applied a Shapley value cost allocation model to fairly distribute the cost savings from operation of five grand coalitions (S) formed by the carriers. The Shapely values were then optimized with mixed integer programming model to realize optimal cost savings from the coalition. The result revealed that the coalitions: S3 (N165,173,700.00) and S4 (N27,200,960.00) contributed significantly to the optimal savings apart from their initial contributions. The path that corresponds to S3 (X3) is the coalition providing service from Calabar to Jos while the path that corresponds to S4 (X4) is the coalition providing service from Calabar to Owerri and the optimal savings is N48,286,760,000.00. Based on these results, we therefore encourage horizontal collaboration among haulage transport providers in their overall interest, that of the shipper and hence ensure supply or distribution chain cost efficiency.

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References

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Authors

Harrison Obiora Amuji

Department of Statistics, Federal University of Technology Owerri, Nigeria

Donatus Eberechukwu Onwuegbuchunam

Department of Maritime Technology and Logistics, Federal University of Technology Owerri

https://orcid.org/0000-0003-2120-9922

don@futo.edu.ng (Primary Contact)

Innocent Chuka Ogwude

Department of Logistics & Transport Technology, Federal University of Technology Owerri, Nigeria

Kenneth Okechukwu Okeke

Department of Maritime Technology and Logistics, Federal University of Technology Owerri, Nigeria

John Folayan Ojutalayo

Department of Nautical Science, Federal College of Fisheries and Marine Technology, Lagos, Nigeria

Christy Chidiebere Nwachi

Department of Urban and Regional Planning, Federal University of Technology Owerri, Nigeria

Mustapha Muhammad Abdulmalik

Department of Transport Management, Ibrahim Badamasi Babangida University Lapai, Nigeria

Amuji, H. O., Onwuegbuchunam, D. E., Ogwude, I. C., Okeke, K. O., Ojutalayo, J. F., Nwachi, C. C., & Abdulmalik, M. M. (2024). Optimized Shapley value cost allocation model for carriers’ collaboration in road haulage transportation. Journal of Sustainable Development of Transport and Logistics, 9(1), 19–29. https://doi.org/10.14254/jsdtl.2024.9-1.2

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Copyright (c) 2024 Harrison Obiora Amuji, Donatus Eberechukwu Onwuegbuchunam, Innocent Chuka Ogwude, Kenneth Okechukwu Okeke, John Folayan Ojutalayo, Christy Chidiebere Nwachi, Mustapha Muhammad Abdulmalik

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