A reply to Mueller (2018) Supply chain collaboration: Further insights into incentive alignment in the Beer Game scenario

Abstract

Purpose: We expand a previous discussion in this journal by proposing a new solution concept, based on game theory, for profit allocation with the aim of aligning incentives in collaborative supply chains.Design/methodology/approach: Through the Gately’s notion of propensity to disrupt, we minimize the desire of the nodes to leave the grand coalition in the search of a self-enforcing allocation mechanism.Findings: We discuss the benefits and limitations of this solution in comparison with more established alternatives (e.g. nucleolus and Shapley value). We show that it considers the bargaining power of the nodes, but it may not belong to the core.Originality/value: Finding a fair and self-enforcing scheme for incentive alignment, and specifically profit allocation, is essential to ensure the long-term sustainability of collaborative supply chains.