Home textile is the most common business line in Denizli, Turkey. However, most companies are not integrated, i.e., they do not include the entire production processes in their facilities. Different stages of manufacturing process are outsourced to other companies located in the same geographic region. As a result of this, there is a considerable increase in transportation costs. In this paper, we consider collaboration between companies in a cluster to reduce their transportation costs. A game theoretic approach is proposed such that the subcontractors can be used jointly and their fabric production capacity can be split among the companies in the coalition in order to meet their demands. A case study of four home textile companies is provided to illustrate the approach. Coalition cost is allocated using different cost allocation methods, and compared to the current situation, we obtain significant cost reductions.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.