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Frans Cruijssen: Game Theory in supply chains

Abstract: Horizontal collaboration is a rising topic in supply chain logistics. Overall, trucks are currently not filled to their maximum capacities. Looking at weight capacity, the average load factor of cross-border road transport in Europe is actually below 50%. With thousands of individual shippers and thousands of logistics service providers, this is a problem that is obviously difficult to solve. One of the possible answers could be to collaborate much more intensively and bundle flows of multiple companies. European governments heavily support this horizontal collaboration and some successful cases have been realized in recent years. One of the hurdles for lasting collaboration however is the issue of fair gain sharing. Who gets which share of the savings that are realized by the group? Cooperative game theory can be of very much use here.