Supply chain coordination: A cooperative game approach

Focusing on the defects of contractual and the bargaining approaches to coordinate the supply chain, this paper builds a cooperative game approach to coordinate the supply chain and applies the Shapley value to distribute the supply chain profit under the condition of its members' participation. The results show that the monopolistic profit can be realized as the performance of the supply chain by the,cooperative game approach and that the distribution based on the Shapley value follows the balanced contribution property and ensures the stability of the supply chain. Further, the comparisons show that the cooperative game approach gets over the defects of contractual and the bargaining approaches.