Methods of Gain Sharing in Horizontal Cooperation Projects

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MAGAZINE №4 (81) August 2017

AUTHORS  

VINOGRADOV A.B.

TYURKINA М.N. - assistant, National Research University Higher School of Economics (Moscow, Russia)

CATEGORY  Analytics and reviews  Logistic integration and coordination

ABSTRACT

Worsening of the macroeconomic conditions as well as tougher rivalry make companies’ management look for additional means of
raising the business competitiveness. In such a situation, managers start to draw their attention to the logistics efficiency along with
the quality of material flow management in supply chains. Horizontal collaboration constitutes one of the ways to increase logistics efficiency and effectiveness which is currently underused by the Russian companies. The article focuses on the essence of the notion «horizontal collaboration», its typology, and benefits that such a cooperation can bring to the organizations of various business forms. The authors examine foreign business cases proving that horizontal collaboration helps to decrease operation costs, raise the quality of the customer service, provide more flexible reaction on the clients’ demand, reduce carbon footprint as a result of doubling delivery elimination and diminution of deadheading. Apart from advantages of horizontal collaboration, the article dwells on the main
obstacles to its implementation. The authors pay specific attention to the issue of gain sharing. The paper scrutinizes major requirements for stable and fair gains allocation based on the application of the game theory methods. Requirements in question include efficiency, symmetry (anonymity), compliance with the «dummy» rule, strong monotonicity, individual rationality. Different methods of gain
sharing are thoroughly reviewed and compared. Comparative analysis shows that gains allocation following Shapley value method
meets all the requirements for stable and fair distribution. As a result, this method can be recommended as the basic one in the horizontal collaboration projects.

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