Price-Directed Cost Sharing and Demand Allocation Among Service Providers with Multiple Demand Sources and Multiple Facilities

2021 ◽  
Author(s):  
Hanlin Liu ◽  
Yimin Yu ◽  
Saif Benjaafar ◽  
Huihui Wang
Keyword(s):  
Cost Sharing ◽  
Cost Allocation ◽  
Problem Definition ◽  
Allocation Scheme ◽  
Capacity Sharing ◽  
Equilibrium Market ◽  
Service Collaboration ◽  
The Cost ◽  
Service Fulfillment ◽  
Demand Allocation

Problem definition: We consider capacity sharing through demand allocation among firms with multiple demand sources and multiple service facilities. Firms decide on the allocation of demand from different sources to different facilities to minimize delay costs and service-fulfillment costs possibly subject to service-level requirements. If firms decide to operate collectively as a coalition, they must also decide on a scheme for sharing the total cost. Academic/practical relevance: We study capacity sharing through demand allocation in service systems in the presence of service-fulfillment costs. Our problem is motivated by service collaboration in healthcare involving public–private partnerships. Methodology: We formulate the problem as a cooperative game and identify a cost allocation that is in the core. Results: The cost-allocation scheme we identify is price-directed, and the cost of each firm consists of three components: (1) the delay cost incurred within the firm; (2) a cost paid for the capacity used by the firm at facilities owned by other firms; and (3) a payment received for fulfilling demand of other firms at facilities owned by the firm. Interestingly, we show that the cost-allocation scheme is equivalent to a market equilibrium—that is, it can be implemented in a decentralized fashion. We extend our analysis to settings where the capacity of each facility is endogenously determined and to settings where a service-priority policy is deployed. Our results are robust to a variety of generalizations: partial sharing, partial transfer, facilities modeled as general queueing systems, and convex delay costs. Managerial implications: Our findings provide guidelines for and insights into how to carry out demand allocation and cost sharing among different firms in the presence of service-fulfillment costs to foster service collaboration. In particular, the equilibrium market prices can be viewed as the prices/subsidies for service collaboration in a public–private partnership.

Comparison of Methods for Allocating Costs of Empty Railcar Movements in a Railcar Pooling System

2005 ◽  
Vol 1916 (1) ◽  
pp. 88-95
Author(s):  
Yao Cheng ◽  
Wei-Hua Lin
Keyword(s):  
Game Theory ◽  
Computational Efficiency ◽  
Cost Allocation ◽  
Comparison Of Methods ◽  
Allocation Scheme ◽  
Before And After ◽  
The Cost

Allocating the cost of empty railcar miles to partners in a railcar pooling system is an important pricing problem in railway management. Recently, the authors of this paper proposed a cost allocation scheme for empty railcar movements based on game theory that explicitly considers the level of participation and contribution from each partner, the costs generated before and after cooperation, and the overall benefit obtained by each partner because of cooperation. This paper compares the performance of the model with three other cost allocation models with respect to fairness, stability, and computational efficiency. The comparison is made with two scenarios adapted from examples documented in the literature. The results indicate that the cost allocation scheme based on game theory outperforms other methods in ensuring fairness and enhancing stability in a coalition. Most remarkably, it yields reasonable results even in situations in which other models behave poorly. Computationally, it is manageable for practical problems.

A Law-and-Economics Perspective on Cost-Sharing Rules for a Condo Elevator

2019 ◽  
Vol 15 (2) ◽  
Author(s):  
Bertrand Crettez ◽  
Régis Deloche
Keyword(s):  
Game Theory ◽  
Cooperative Game ◽  
Cost Sharing ◽  
Cooperative Game Theory ◽  
Cost Allocation ◽  
Law And Economics ◽  
Theory Approach ◽  
Sharing Rule ◽  
Sharing Rules ◽  
The Cost

Abstract How to enhance the maintenance, repair and improvement of condo buildings? We address this issue by focusing on the case of an elevator installation whose benefits are not uniform across units. We examine the link between majority approval and cost sharing. Relying on a cooperative game theory approach, we prove the coalitional stability of any cost allocation which is such that the unit shares are a non-decreasing function of the floor level. Second, we show that the two surplus allocations induced, respectively, by the de facto cost-sharing rule used in France and the equal cost-sharing rule may fail to be coalitionally stable. By insisting that the cost sharing must depend on the relative individual advantages provided by an improvement, French law increases the risk of disputes between neighbors, compared to other sharing rules.

scholarly journals Cost Allocation Mechanism Design for Urban Utility Tunnel Construction Based on Cooperative Game and Resource Dependence Theory

Energies ◽  
2019 ◽  
Vol 12 (17) ◽  
pp. 3309 ◽  
Author(s):  
Zhi Zhang ◽  
Jiaorong Ren ◽  
Kaichao Xiao ◽  
Zhenzhi Lin ◽  
Jiayu Xu ◽  
...  
Keyword(s):  
Cost Sharing ◽  
Resource Dependence ◽  
Cost Allocation ◽  
Resource Dependence Theory ◽  
Tunnel Construction ◽  
Power Cables ◽  
Allocation Mechanism ◽  
Dependence Theory ◽  
Utility Tunnel ◽  
The Cost

The urban utility tunnel presents solutions for the sustainable development of urban underground space, and is an important carrier of power distribution network and integrated energy systems. Considering the high investment cost of utility tunnels and the limitations of traditional cost sharing methods (i.e., spatial proportional method, direct-laying cost method and benefit-based proportional method), it is of great significance to establish a fair and practical cost sharing mechanism. First, an improved Shapley value-based spatial proportional method is proposed. A comprehensive decision-making mechanism for utility tunnel construction cost allocation is established by using the improved spatial proportion, the life-cycle direct-laying cost proportion, and the benefit proportion of pipeline companies as the cost allocation indexes. The resource dependence theory is introduced to quantify the bargaining power of each pipeline company in the negotiation of the cost allocation. The weights of the cost allocation indexes in the comprehensive decision-making model are optimized with the objective of maximizing the overall satisfaction of the pipeline companies. Simulations based on the data of utility tunnel pilots in China illustrate that the proposed cost allocation mechanism has the highest overall satisfaction and is more acceptable and more feasible than the traditional cost allocation methods. For power companies, the cost of laying power cables can be significantly reduced by utility tunnels, and laying 10 kV power cables has been shown to have higher economic benefits.

scholarly journals Cost Sharing in the Prevention of Supply Chain Disruption

2017 ◽  
Vol 2017 ◽  
pp. 1-8
Author(s):  
Wen Wang ◽  
Kelei Xue ◽  
Xiaochen Sun
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Cost Allocation ◽  
Allocation Mechanism ◽  
Supply Chain Disruption ◽  
Manufacturing Company ◽  
The Cost ◽  
Disruption Risks ◽  
Considerable Loss

We examine the influence of cost-sharing mechanism on the disruption prevention investment in a supply chain with unreliable suppliers. When a supply chain faces considerable loss following a disruption, supply chain members are motivated toward investing in manners that reduce their disruption probability. In improving supply chain reliability, the cost-sharing mechanism must be set appropriately to realize the efficiency of the disruption prevention investment. In a supply chain where the focal manufacturing company has its own subsidiary supplier and an outsourcing supplier, we analyze different forms of cost-sharing mechanisms when both suppliers confront disruption risks. Through the cost-sharing mechanisms presented in this study, supply chain members can improve their reliability via disruption prevention investments without considerably increasing the total supply chain cost. We present two concepts, the cost-sharing structure and the cost-sharing ratio, in this study. As the two key components of cost-sharing mechanism, these two elements constitute a practicable cost allocation mechanism to facilitate disruption prevention.

scholarly journals Decisions and Coordination in a Capacity Sharing Supply Chain considering Production Cost Misreporting

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-12
Author(s):  
Daozhi Zhao ◽  
Hongshuai Han
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Production Cost ◽  
Revenue Sharing ◽  
Negative Effects ◽  
Sales Revenue ◽  
Capacity Sharing ◽  
Pricing Decision ◽  
The Game Theory ◽  
The Cost

In the manufacturing capacity sharing platform, considering the manufacturing capacity provider’s cost misreporting behavior and the collusion behavior of the platform operator, this paper built a supply chain consisting of a platform operator, a capacity provider with surplus capacity, and a manufacturer with insufficient capacity. This paper studied the influence of the cost misreporting behavior on the supply chain members’ decisions and profits. By use of the game theory, in the scenarios including the supplier misreporting to other supply chain members and the supplier colluding with the platform, the paper analyzed the optimal pricing decision, misreporting coefficient decision, and platform’s service fee decision and further compared the profits of the supply chain and its members. The results show that the capacity provider tends to overstate the production cost for gaining more profits, which exerts negative effects on profits of other members and the supply chain. Compared with the case of misreporting to both the manufacturer with insufficient capacity and the platform, the case of colluding with platform is more favorable to the profits of the manufacturer, the platform, and the supply chain, while the supplier prefers to choose the former situation. When the sales revenue-sharing proportion, cost-sharing proportion, and service fee satisfy certain conditions, the sales revenue-sharing and cost-sharing contract can avoid the capacity provider’s cost misreporting behavior and coordinate the supply chain.

Developing the adaptive process-based budgeting through TD-ABC and TD-ABB as part of strategic management accounting

2020 ◽  
Vol 23 (10) ◽  
pp. 1182-1194
Author(s):  
A.A. Akhmetzyanov ◽  
A.Yu. Sokolov
Keyword(s):  
Strategic Management ◽  
Cost Allocation ◽  
Management Accounting ◽  
Practical Significance ◽  
Common Time ◽  
Strategic Management Accounting ◽  
Scientific Papers ◽  
The Subject ◽  
The Common ◽  
The Cost

Subject. The article focuses on the advanced time-driven tools for allocating overhead expenses, which are based on process-based budgeting. Objectives. We articulate a technique for cost allocation so as to assess the cost of each process with reference to the common time driver. Methods. The study relies upon methods of systematization, classification, analogy and comparison, and summarizes the scientific literature on the subject. Results. The article presents our own suggestions on implementing TD-ABC and TD-ABB into the strategic management accounting process of developer companies. The principles were proved to help more effectively allocate overhead expenses and assess the capacity load of each process performed by functions, departments and employees. Carrying out a comparative analysis, we found certain reserves for utilizing resources more effectively. Conclusions and Relevance. The findings are of scientific and practical significance and can be used by developer and construction businesses. The conclusions can prove helpful for scientific papers, student books, and further research.

Renovating the View of Cost Sharing for the Underground Low Voltage Cable Projects in Hanoi

2019 ◽  
Vol 35 (5E) ◽  
Author(s):  
Pham Thi Thu Ha ◽  
Phan Dieu Huong
Keyword(s):  
Willingness To Pay ◽  
Cost Sharing ◽  
Low Voltage ◽  
Power Grid ◽  
Field Studies ◽  
Power Industry ◽  
Well Field ◽  
The Subject ◽  
Sharing Responsibility ◽  
The Cost

Underground power grid projects in Hanoi is so urgent that it requires immediate implementation. To synchronously and quickly implement the underground power grid projects, people in charge should not follow the outdated perspectives of just including the power industry, but also need to call for the support and cost sharing responsibility from consumers. This paper aims at approaching the subject both from the producers and consumers’ perspectives to together sharing the cost of putting the power grid underground not only in Hanoi but other metropolitans in Vietnam as well. Field studies (including 104 families) at Hoan Kiem District, Hanoi and CBA method were applied to investigate the willingness to pay (WTP) level of consumers to share the cost with the power industry for the underground power grid projects in Hanoi. The overview of the results shows that cost for the underground power grid in Hoan Kiem District ranging from 30,000 VND/household/month to 46,000VND/household/month. On the other hand, the willingness to pay of a typical household of four people within Hoan Kiem District ranges from 17,000VND/month to 24,000VND/month, with the most favorable method of annual payment within a detailed timeline.

The Mismatch between Expectations and Realities of AS4 Audits: A Post-Implementation Research Analysis

2017 ◽  
Vol 37 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Sanaz Aghazadeh ◽  
Marietta Peytcheva
Keyword(s):  
Implementation Research ◽  
Risk Premium ◽  
Cost Benefit ◽  
Multiple Methods ◽  
Material Weakness ◽  
Key Stakeholders ◽  
Auditing Standards ◽  
Equilibrium Market ◽  
The Cost ◽  
Research Analysis

SUMMARY We conduct a post-implementation research analysis of AS4, a standard guiding voluntary audits of material weakness (MW) remediation disclosures, to understand the reasons for the scarcity of AS4 audits in practice. We use multiple methods (experiments, comment letter analysis, and surveys) to understand the perspectives of key stakeholders. We find that regulators' expectations of the use of the standard did not come to fruition because an equilibrium market for active use of the standard could not be achieved; that managers desire to engage in AS4 audits for the riskier MWs but do not expect the associated costs to be high; and that auditors are reluctant to audit riskier MWs and would charge a considerable risk premium. Finally, we find that investors value AS4 audits, especially for riskier MWs, and find value in an AS4 audit for those risky MWs beyond that of the year-end audit. The overall findings of our study indicate that a mismatch in the cost-benefit functions of the key stakeholders led to a lack of AS4 audits. Our findings are important given the high costs associated with auditing standards development and approval.

A claims problem approach to the cost allocation of a minimum cost spanning tree

2021 ◽  
Author(s):  
José-Manuel Giménez-Gómez ◽  
Josep E. Peris ◽  
Begoña Subiza
Keyword(s):  
Spanning Tree ◽  
Cost Allocation ◽  
Minimum Cost ◽  
Claims Problem ◽  
The Cost
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