A Research in Supply Chain Profit Allocation Based on Cooperation Game Theory

With globalization of the world economy, supply chain management has been emphasized as one of the most important management strategies. And, supply chain profit allocation is a significant part in supply chain management, which keeps the supply chain running efficiently and steadily. This paper, comprehensively discusses the supply chain profit allocation issue, based on cooperation game theory. Firstly, the characteristics and running modes of supply chain profit allocation are thoroughly discussed. Secondly, the basic principles and conditions of the supply chain profit allocation are analyzed according to the rules of running a supply chain. Thirdly, a supply chain profit allocation model is presented based on cooperation game theory (Shapley Value). Finally, a numerical example is given to illustrate its application.