The effect of consolidated periods in heterogeneous lot-sizing games

We consider a cooperative game defined by an economic lot-sizing problem with heterogeneous costs over a finite time horizon, in which each firm faces demand for a single product in each period and coalitions can pool orders. The model of cooperation works as follows: ordering channels and holding and backlogging technologies are shared among the members of the coalitions. This implies that each firm uses the best ordering channel and holding technology provided by the participants in the consortium. That is, they produce, hold inventory, pay backlogged demand and make orders at the minimum cost of the coalition members. Thus, firms aim at satisfying their demand over the planing horizon with minimal operation cost. Our contribution is to show that there exist fair allocations of the overall operation cost among the firms so that no group of agents profit from leaving the consortium. Then we propose a parametric family of cost allocations and provide sufficient conditions for this to be a stable family against coalitional defections of firms. Finally, we focus on those periods of the time horizon that are consolidated and we analyze their effect on the stability of cost allocations.

A game-theoretic multi-stakeholder model for cost allocation in urban consolidation centres

Recently, many European local authorities have set up Urban Consolidation Centres (UCC) for dealing with challenges arising from the environmental and social impacts of logistical activities in urban contexts through shipment synchronisation and carrier coordination policies. However, the number of successful UCC projects led by local authorities in Europe is low, with most of the UCCs failing to achieve financial sustainability after the initial experimental phase, which is often heavily supported by public funds. In order to propose mechanisms that could favour the economic and financial sustainability of UCC systems, this research develops an adaptation of game-theoretic approaches to the problems of responsibility and cost allocation among stakeholders participating in a UCC delivery network. A solution based on the Shapley Value concept is employed to derive cost allocations; applications of the model to a real-world scenario are evaluated. An extensive sensitivity analysis shows that the proposed cost allocation rules can provide alternative arrangements, based on extended responsibility concepts, which can alleviate the burden on local authorities for the set up of UCCs. As such, results provide useful policy and practice implications on how to safeguard UCCs’ viability under different scenarios, including the outsourcing of the last-mile deliveries.

The Role of Strategic Cost Management in Marketing Decisions: A Case Evidence of Brand Acquisition Assessment

While the role of strategic cost management (SCM) is heralded to pervade through all the links in a firm’s value-chain (Anderson, 2006; Shank & Govindarajan, 2004) the specific role of SCM in relation to a firm’s marketing function has thus far been limited to a few areas such as product pricing and analysing customer profitability through activity-based cost allocations (Datar & Rajan, 2018; Foster & Gupta, 1994; Van Raaij, 2005). This paper presents a case study to show how SCM concepts can be extended to evaluate brand acquisition by a large organisation. Using shareholder value analysis for pricing the brand and combining with financial statement analysis and strategic positioning models such as Porter’s five forces and SWOT, this paper conducts an assessment in order to offer recommendations for a multi-billion peso investment of a large Philippine-based processed foods company seeking to acquire a new brand.