Natural resources allocation mechanism based on Coalition configuration: Forest Supply Chain Analysis.

Abstract

Designing an effective mechanism to allocate a limited amount of public owned natural resources to competing companies is challenging. Many different criteria such as maximizing the value of the resources and ensuring equity among the beneficiaries, must be considered. This complex problem is observed in the province of Quebec (Canada). In this study, we propose an integrated approach combining a cooperative game model and a multi-objective optimization model to determine the quantities of forest resources to allocate to several mills. This approach attempts to capture collaboration benefits and mills individual performances in the allocation process, while promoting equity among them. More precisely, we consider collaboration between mills in the upstream supply chain (i.e., harvesting, road construction/upgrading, and transportation operations) to reduce operational costs as well as their individual sustainability performances (economic, environmental and social aspects). The coalitions of our case study overlap and thus, we use the concept of coalition configuration value. In particular, we propose a methodology for its estimation based on the collected data. We evaluate and discuss the advantages of our approach through computational experiments performed on a real case study. In our approach we consider interactions among mills, but also interactions among criteria thank to the Choquet Integral Function. Thus, our approach could be used as a guiding framework for decision-makers involved in the important problem of public-owned natural resource allocation.