The traveling salesman game: An application ofcost allocation in a gas and oil company

Stefan Engevall, Maud Göthe-Lundgren and Peter Värbrand

Annals of Operations Research, 1998, vol. 82, issue 0, 203-218

Abstract: In this article, a cost allocation problem that arises in a distribution planning situation atthe Logistics Department at Norsk Hydro Olje AB is studied. A specific tour is considered,for which the total distribution cost is to be divided among the customers that are visited.This problem is formulated as a traveling salesman game, and cost allocation methods basedon different concepts from cooperative game theory, such as the nucleolus, the Shapleyvalue and the t-value, are discussed. Additionally, a new concept is introduced: the demandnucleolus. Computational results for the Norsk Hydro case are presented and discussed. Copyright Kluwer Academic Publishers 1998

Date: 1998
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DOI: 10.1023/A:1018935324969

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