Collaborative distribution center location with outbound transportation by common carriers

Deciding members of the collaboration and allocating the incurred cost and resulting profit between collaborators are major problems in collaborations. In this study, establishment of horizontal collaboration problem, a structure in which firms come together for the common strategic objectives, and facility location problem in a two-echelon supply chain is combined. Apart from other studies in the literature, collaborators in the horizontal collaboration can use the facilities jointly while responding customers' orders. Through collaboration the cost of the facility will be shared which they bear alone before collaboration, moreover unit transportation cost will be reduced with freight consolidation. In this study, mathematical models are developed in order to establish the optimal collaboration for collaborators, to select facility locations with convenient capacities and meet customer demands with minimum cost, facility and transport cost allocation between collaborators. Unlike other studies in the literature, this study is one of the pioneer studies which bring these three elements together thus, data generation is done. The performances of the models are evaluated on test instances.