A profit allocation mechanism for customer-to-manufacturer platform in e-commercial business

TL;DR

This paper proposes a profit allocation mechanism for a customer-to-manufacturer platform in e-commerce, optimizing order reallocation and ensuring fair profit sharing to promote alliance stability and platform sustainability.

Contribution

It introduces a novel profit allocation mechanism based on core concepts that considers each manufacturer's contribution, enhancing alliance stability in C2M platforms.

Findings

Mechanism effectively allocates profits fairly among manufacturers.

Numerical experiments demonstrate the mechanism's practical applicability.

Supports alliance stability and platform sustainability.

Abstract

A centralized collaboration problem of customer-to-manufacturer (C2M) platform in e-commercial business is studied in this paper, where an e-commercial company and multiple manufacturers come to an agreement for constituting a collaborative alliance to satisfy the product orders of multiple customers. The problem has two important issues which are the optimal reallocation of customer orders among the manufacturers to maximize a total profit of the alliance and a fair allocation of the profit among the manufacturers so as to assure the stability of the alliance and the sustainability of C2M platform. A profit allocation mechanism is proposed which is based on core allocation concept and considers the contribution of each manufacturer in fulfilling orders. The effectiveness of the mechanism is evaluated with numerical experiments on sixty instances generated based on real data of Alibaba.