A COORDINATION MODEL FOR A COMPETITIVE SUPPLY CHAIN USING COOPERATIVE AND NON-COOPERATIVE GAME THEORY

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Abstract

Seller–buyer supply chain has a wholesale price mechanism. Because of this mechanism, seller and buyer have conflicts of interest. For example, due to dynamic market demand, sellers prefer to order flexibly from the manufacturer so as to avoid incurring inventory costs and to be able to respond flexibly to market changes. In this paper, several seller–buyer supply chain models are proposed which are considered both competition and cooperation between seller and buyer. We assume that the demand of each product is jointly influenced by price and advertising cost. The presented models are considered the relationships between seller and buyer by non-cooperative and cooperative games. The non-cooperative game is based on the Nash solution concept. We consider both seller and buyer have same power in supply chain and do their decisions simultaneously. Such conflicts between seller and buyer can result in an inefficient supply chain. Due to this, we consider the cooperative game model to achieve more profit rather than non-cooperative game. Numerical examples presenting in this paper, will compare the results between cooperative and non-cooperative games considered.

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Journal of Modeling in Engineering
Volume 10, Issue 29
July 2012
Pages 19-31

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  • Receive Date: 28 January 2017
  • Revise Date:
  • Accept Date: 28 January 2017

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