Altruistic Profit Allocation for Inventory Systems with Deteriorating Items-Based on Unequal Aversion Model

FENG Hairong, ZHOU Yongwu, ZENG Yinlian, QIAN Qian

Journal of Systems Science and Mathematical Sciences ›› 2021, Vol. 41 ›› Issue (9) : 2460-2476.

PDF(639 KB)
PDF(639 KB)
Journal of Systems Science and Mathematical Sciences ›› 2021, Vol. 41 ›› Issue (9) : 2460-2476. DOI: 10.12341/jssms20395

Altruistic Profit Allocation for Inventory Systems with Deteriorating Items-Based on Unequal Aversion Model

  • FENG Hairong1 ,ZHOU Yongwu2 ,ZENG Yinlian3 , QIAN Qian1
Author information +
History +

Abstract

With increasing pressure to reduce cost as well as carbon footprint for firms, horizontal cooperation between two or more dependent or independent firms may be a win-win strategy. In this paper, we investigate collaborative procurement problem among retailers in a supply chain with deteriorating items under the carbon cap-and-trade policy. We first model the collaborative procurement system under the carbon cap-and-trade policy, and then identify the optimal joint ordering strategy. Then we formulate the profit allocation game for the collaborative procurement problem. It is proved that the corresponding game is superadditive. Moreover, we show that collaborative procurement among retailers under the carbon cap-and-trade policy not only increases the total profit but also reduces the total amount of carbon emissions. Since agents may have other-regarding preferences, we further design an altruistic profit allocation rule. We calculate the maximum voluntary payment for retailers who transfer out the carbon allowance, categorize free-riders and contributors by employing inequality aversion model, and develop the dominant strategy for contributors. We further show that the proposed altruistic profit allocation rule also lies in the core of the corresponding profit allocation game. The results show that the retailers with altruistic behavior will transfer out the carbon allowance at a price below the carbon trading market price, which bring additional consumer surplus to other retailers. This in turn will enhance social status and reputation for retailers with altruistic behavior, without incurring significant cost. All in all, cooperation can be reinforced by members' altruistic behavior over the long term by employing the proposed altruistic profit allocation to distribute the additional profit.

Cite this article

Download Citations
FENG Hairong, ZHOU Yongwu, ZENG Yinlian, QIAN Qian. Altruistic Profit Allocation for Inventory Systems with Deteriorating Items-Based on Unequal Aversion Model. Journal of Systems Science and Mathematical Sciences, 2021, 41(9): 2460-2476 https://doi.org/10.12341/jssms20395
PDF(639 KB)

230

Accesses

0

Citation

Detail

Sections
Recommended

/