Cooperative cellular manufacturing system: a cooperative game theory approach

In the cellular industry, the components of products are increasingly being manufactured by multiple companies, which are distributed across different regions resulting in increased production costs. Here, a cooperative cellular manufacturing system is introduced to decrease these costs. A mathematical programming model has been proposed, which evaluates the production cost when companies work independently and the model is then extended to consider coalitional conditions in which the companies cooperate as an integrated cell formation system. A key question that arises in this scenario is how to arrange the cells and machines of multiple companies when their cell formation systems are designed cooperatively. Through a realistic case study of three high-tech suppliers of the Mega Motor Company, we show that these companies can reduce the costs through a cooperative cellular manufacturing system. We then compute the cost saving of each coalition of companies obtained from cooperation to get a fair allocation of the cost savings among the cooperating firms. Four cooperative game theory methods including Shapley value, τ -value, core-center, and least core are proposed to examine fair sharing of cost saving. A comprehensive analysis of the case study reveals important managerial insights.