Profit Allocation among Partners in Coal electricity Supply Chain
Year: 2012

The actualization of supply chain management is an effective approach to solve the problem of coalelectricity supply chain, and a reasonable profit allocation mechanism is the key to achieve it. In this paper, a new method of profit allocation among partners in coalelectricity supply chain is put forward based on the Shapley value, the multi factor synthetical modification,and the confirmation of modificatory coefficients by using the ideal point principle according to a commentary on the existing research. Finally, an example is given to show the feasibility and availability of the developed method.  CoalElectricity Supply Chain;Profit Allocation;Shapley Value;Ideal Point Principle 1.Introduction At present, a huge contradiction mainly reflected in the price dispute exists in Chinese coal production enterprises and electricity generators in the coalelectricity supply chain. Moreover, all the parties have been closely concerned about the interests problems of the supply chain optimization between coal production enterprises and electricity generators. As to the issue of cooperation in coalelectricity supply chain management, Chinese scholars mainly studied the following aspects: the alliance's establishment of the coalelectricity supply chain (Cheng Min, 2009) the game relationship between coal production enterprises and electricity generators (Wang Ye, 2007; ZHAO Xiao li, 2008) and the mechanisms of cooperation in coal production enterprises and electricity generators (ZHAO Xiao li, 2008; Li Li,2010) As the interests distribution within coalelectricity supply chain is very important, this article intends to build the profit allocation in a new approach. At present, methods to solve supply chain partners' profit allocation include: pricing method (Xu Chuanyun,2011) Stackelberg game analysis (Hyori Jeon,2011; Shaoxuan Zhang,2011) and Shapley value method (Shapley, 1953) Among these methods, Shapley value is a classical way of allocating the profit obtained by cooperation among a set of agents. But there are two deficiencies of the current studies to determine the correction factors. First, they only take single correction factor into account (Ma Shihua, 2006; Dai Jianhua, 2004) second, it use Delphi method to determine the correction factors (Hamid Turab Mirza, 2010) which has subjective tendency. This paper proposed a new research of coal electricity supply chain partners' profit allocation which based on Shapley value method; then used multi factors integrated correct allocation result, and used AHP method to determine the weight of correction factors. 2. Research of the profit allocation of coal electricity supply chain First, basing on the method of Shapley Value, calculate the interest allocation among coal enterprises, electricity generator and coal distribution enterprise in balancing the profit allocation of coal electricity supply chain, called the basic allocation of benefits. Second, use the multi factorial integrated correction method. Coal electricity supply chains are different from common manufacturing supply chains particularly in: (1) the entities in the supply chain are relatively stable; (2) the basic nature of the supply chain link entity point is not agility, but the quality stability; (3) Sales is the key of coalelectricity supply chain performance evaluation; (4) coalProfit Allocation among Partners in Coalelectricity Supply Chain Li Wei wei, Wu Chong, Zhang Xin ying, Liu Qing hua Advances in information Sciences and Service Sciences(AISS) Volume4, Number6, April 2012 doi: 10.4156/AISS.vol4.issue6.18 153 electricity supply chain focuses on quality, environment, cost and time;(5) the profit allocation among the supply chain is complex. Therefore, the objectives of coal electricity supply chain management are not agile but balanced supply and (6) the key point of the node enterprises in the supply chain is not agility, but the stability of quality. In China, the phenomenon of power failure caused by the lack of freight capacity is becoming more and more frequent, and the overall coal electricity supply chain logistics capabilities limited by the objective environment is difficult to change in the near future, while the high Chinese coal electricity transport cost is a major factor in the development restriction of the Chinese coal industry. The main way to solve the above problems is to optimize the coal electricity supply chain. So the coal distribution enterprises mainly undertake the realization of the balanced supply goal of the entire supply chain; at the same time, coal distribution enterprises also run the risk of the lack of supply, the depression of market and the lack of freight capacity ,while the electricity generators are mainly responsible for the market risk. The co contribution in the supply chain partnerships is an important factor affecting earnings. The contributions of cooperaions among the coal production enterprises, electricity generators and the coal distribution enterprises are different, so different affects on the profits of the whole supply chain should be reflected accordingly in the profit allocations. Therefore, considering the synthetical factors of balanced supply capacity, risk taking abilities and the cooperative contributions, the writer adjusts the profit allocation of Shapley value method. At last, this paper confirmed the correction coefficients by ideal point principle. Correction coefficients of profit allocation should reflect partners' balanced supply capacity, risk taking abilities and cooperative contributions to the influence of profit allocation in the overall supply chain. Based on the deal point principle, we established a virtual coal electricity supply chain system which has the strongest balanced supply ability, the biggest risk taking ability and the highest cooperative contribution ability as a benchmarking to adjust the basic allocation interests. Moreover, comparing the benchmarking supply chain system with the coal production enterprises, coal distribution enterprises and electricity generators, we determined the respective interest correction coefficients according to the comparison results. 3.Shapley value and its amendments 3.1 Basic principle of Shapley value Shapley value method is a mathematical method proposed by Shapley L.S. in 1953 for solving the issue of cooperation among people. When n individuals engage in some economic activities, some of them get involved in some form of cooperation, and get certain profits. When the activities of the interests are non confrontational, an increase in the number of people involved in the cooperation doesn't result in the reduction in the efficiency so that the cooperation of all individuals can bring the greatest profits. Shapley value method is a program that assigns this greatest benefits. Definition1. (Shapley, 1953) The Shapley value of a coalitional game, N v is an allocation rule that assigns a value i v j to buyer i where W 1, 2, i s s i v w s v s v s i i n j I a L (1) Among them, 1) n s s w s n (2) where W{ N i is the set of all players except i This allocation rule is also called the Shapley Shubik mechanism, as the characteristic function v S only depends on the members in coalition S The value presented in Eq. (1) is referred to as player i s Shapley value, which can be justified if one imagines that player i joins the game in a random order. Player i receives an extra amount that he contributes to the existing coalition of players, W{ S i namely, v S i v S This contribution must be averaged over all the possible orders in which player Profit Allocation among Partners in Coalelectricity Supply Chain Li Wei wei, Wu Chong, Zhang Xin ying, Liu