| Article ID: | iaor19991493 |
| Country: | Netherlands |
| Volume: | 82 |
| Issue: | 1 |
| Start Page Number: | 453 |
| End Page Number: | 471 |
| Publication Date: | Aug 1998 |
| Journal: | Annals of Operations Research |
| Authors: | Gthe-Lundgren Maud, Vrbrand Peter, Engevall Stefan |
| Keywords: | financial |
In this article, a cost allocation problem that arises in a distribution planning situation at the 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 based on different concepts from cooperative game theory, such as the nucleus, the Shapley value and the τ-value, are discussed. Additionally, a new concept is introduced: the demand nucleolus. Computational results for the Norsk Hydro case are presented and discussed.