A Game Theoretic Inventory Model for a Two-Echelon Supply Chain with Poisson Demand

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Alaei, Saeed | 2011

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 42607 (01)
University: Sharif University of Technology
Department: Industrial Engineering
Advisor(s): Hajji, Alireza
Abstract:
In this research, we study the differences between the centralized and decentralized approaches in a two-stage serial supply chain including a manufacturer and a retailer under the lost sale policy. The centralized approach results in optimal solution of the system and the decentralized one is based on Stackelberg game in which the manufacturer is the leader. The retailer uses the continuous review (r, Q) policy and the demand arrives according to the stationary Poisson process. In order to obtain the solution for two approaches, a set of computational steps are developed. Furthermore, we provide a numerical example and the corresponding sensitivity analysis to compare the two approaches. Here are some results: (a) The decentralized approach reduces the system’s cost efficiency, (b) The lead time and the order quantity in Stackelberg approach is always greater than that in centralized approach, (c) In Stackelberg approach, the retailer cost increment is always greater than the manufacturer cost decrement, (d) Stackelberg approach raises the supply chain inventory relative to the centralized approach
Keywords:
Stackelberg Game ; Game Theory ; Multi-Echelon Inventory Control ; Continuous Review Policy