Analysing collaborative performance and cost allocation for the joint route planning problem

Abstract

Although organisations become increasingly aware of the inevitable character of horizontal collaboration, surveys report failure rates up to 70 percent for starting strategic partnerships. While a growing body of research acknowledges the importance of the partner selection and cost allocation process, no extensive study has been performed on the numerical relationship between specific company traits, applied allocation mechanisms and collaborative performance. This paper investigates the impact of coalition characteristics on attainable collaborative savings and cost allocation values in a joint route planning context. Results indicate that collaborative order sharing provides significant operational benefits and can be based on intuitively appealing cost allocation techniques, which may reduce alliance complexity and enforce the strength of mutual partner relationships.