Dynamic Game-theoretic Model for Coordinating Pricing and Inventory Decisions in a Supply Chain with Retailer Competition
- 10.2991/icetis-13.2013.33How to use a DOI?
- Supply Chain; Dynamic Non-cooperative Game; Nash Equilibrium; Pricing; Inventory
In this paper, we discuss how a manufacturer interacts with his multiple competing retailers to optimize their individual net profits through coordinating pricing and inventory decisions in a two-echelon supply chain. The manufacturer purchases raw materials outside to produce substitutable products to different retailers. The manufacturer determines his optimal wholesale prices for different retailers, setup time interval for the products and replenishment cycle for raw materials to maximize his profit. For each retailer, he considers optimal retail prices and replenishment policies to maximize his profit. The problem is modeled as a dynamic non-cooperative game in which all the competing retailers formulate a subgame and as a sector play the whole game with the manufacturer. Analytical method and solution algorithm are developed to determine the Nash equilibrium of this game. A numerical study is conducted to examine the influence of market and production related parameters on decisions and profits of the supply chain and its constituent members.
- © 2013, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Yun Huang AU - George Q. Huang AU - Kuifun Ip Gang PY - 2013/06 DA - 2013/06 TI - Dynamic Game-theoretic Model for Coordinating Pricing and Inventory Decisions in a Supply Chain with Retailer Competition BT - Proceedings of the 2013 the International Conference on Education Technology and Information System (ICETIS 2013) PB - Atlantis Press SP - 147 EP - 151 SN - 1951-6851 UR - https://doi.org/10.2991/icetis-13.2013.33 DO - 10.2991/icetis-13.2013.33 ID - Huang2013/06 ER -