Allocation of Transportation Cost & CO2 Emission in Pooled Supply Chains Using Cooperative Game Theory

The sustainability of supply chain,both economical and ecological, has attracted intensive attentions of academic and industry. It is proven in former works that supply chain pooling given by horizontal cooperation among several independent supply chains create a new common supply chain network that could reduce the costs and the transport CO2 emissions. In this regard, this paper introduces a scheme to share in a fairly manner the savings. After a summary of the concept of pooled-supply-networks optimization and CO2 emission model, we use cooperative game theory as the cooperative mechanism for the implementation of the horizontal pooling. Since we proved the related pooling game to be super-additive, a fair and stable allocation of common gain in transportation cost and CO2 emission is calculated by Shapley Value concept. Through a case study, the results show that supply chains pooling can result in reductions of both transportation cost and carbon emissions, and that the increase of carbon-tax rate gives enterprises more incentives for the implementation of such pooling scheme.