Globally unique algorithm for precise cost allocation in the network

Delivery costs Globally unique algorithm for precise cost allocation in the network

2025-02-17 By | Translated by AI 2 min Reading Time

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The route planner Greenplan by the Ehrhardt Partner Group (EPG) has now been expanded to include fair cost allocation for shipments in a network. Thanks to the calculation of the actual costs of individual shipments—both financially and ecologically—no shipment in a network must be burdened with disproportionate costs anymore.

A fair cost distribution for network shipments is now possible with the "Happy Nucleolus" algorithm.(Image: EPG) — A fair cost distribution for network shipments is now possible with the "Happy Nucleolus" algorithm.
(Image: EPG)

So far, logisticians have determined delivery costs based on historical data or rough estimates. Together with the University of Bonn (Germany), the Ehrhardt Partner Group has now developed a complex algorithm that enables the calculation of the actual costs of individual shipments within a network. The "Fair Cost Allocation" functionality is based on discrete mathematics and the research of Prof. Dr. Jens Vygen and his team.

The solution adapts the nucleolus concept from cooperative game theory to address the complex challenges in calculating delivery costs – one of the major yet unsolved problems in logistics. As a result, an optimized algorithm, referred to as the "Happy Nucleolus," ensures that no shipments within a network are disproportionately burdened with costs.

The 'Fair Cost Allocation' can be applied in all business areas that benefit from an exact calculation and assignment of costs to shipments.

Dr. Clemens Beckmann, CEO at Greenplan

The application areas of the algorithm are broad and transformative: they range from third-party logistics providers to retail and postal and parcel services. With "Fair Cost Allocation," Greenplan offers for the first time a solution capable of calculating the assignment costs of each delivery to a specific network and reducing the overall effort through strategic allocation.

Effortless calculation for multiple customers

To this end, the new algorithm evaluates the resources needed for deliveries, both on their own and within a network with multiple customers. These insights are invaluable for the route planning process and, when combined with the Greenplan route planning solution, can unlock entirely new optimization potential, particularly in delivery areas with heterogeneous delivery densities, according to EPG.

In addition to calculating costs, the algorithm also considers greenhouse gas emissions. The new algorithm determines the ecological footprint of each individual shipment and then evaluates the adjusted costs in the context of a multi-customer network.

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