A multi-period order allocation model of two-echelon logistics service supply chain based on inequity aversion theory
by Weihua Liu; Zhicheng Liang; Yang Liu; Yijia Wang; Qian Wang
International Journal of Shipping and Transport Logistics (IJSTL), Vol. 7, No. 2, 2015

Abstract: By considering a two-echelon supply chain composed of a logistics service integrator (LSI) and several functional logistics service providers (FLSPs), this paper builds an adjusted order allocation utility (AOAU) function of FLSP during multi-period based on inequity aversion theory, and then establishes an order allocation model within multi-period logistics service supply chain. When FLSP's inequity feeling exceeds its patience limit, LSI can make quick or postpone improvement about the allocation plan for the next period. The aim of this proposed model includes two goals: one is to maximise the profit of LSI and the other is to maximise the comprehensive order allocation utility (COAU) of FLSPs. The ideal point method is used to obtain the optimal solution and a numerical example is given by software MATLAB 7.10. The effects of FLSPs' behaviour parameters on order allocation are analysed in detail. The results show that the profit of LSI and the COAU of FLSPs will decrease with the increase of inequality aversion coefficients of FLSPs but it cannot be increased endlessly through changing the patience limit of FLSPs. Additionally, postponed improvement adopted to order allocation model has better effects than that of prompt improvement.

Online publication date: Fri, 06-Mar-2015

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Shipping and Transport Logistics (IJSTL):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?


Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com