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Pricing and lead-time decisions in a decentralized supply chain under competition

Afzalabadi, M ; Sharif University of Technology

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  1. Type of Document: Article
  2. Abstract:
  3. In this paper we study a two-echelon decentralized supply chain consists of one retailer and several manufacturers in competitive environment. The manufacturers compete on their price and lead time. To model the interactions between the retailer and manufacturers, we use Stackelberg game in which the manufacturers decide on their wholesale price and lead time as leader and the retailer decides on retail price and its order quantity to each manufacturer as follower. Besides, we use the Nash Equilibrium analysis to investigate the horizontal competition between manufacturers to model their simultaneous decision making on their price and lead time. In this problem, the customers' demand is a linear function of retailer's price. The proportion of demand the retailer assigns each manufacturer depends on its price and scheduled lead time. The objective of each member of this supply chain is maximizing its profit
  4. Keywords:
  5. Nash equilibrium ; Chains ; Competition ; Computation theory ; Costs ; Decision making ; Game theory ; Manufacture ; Sales ; Supply chain management ; Competitive environment ; Decentralized supply chains ; Linear functions ; Nash equilibria ; Order quantity ; Retail price ; Stackelberg Games ; Whole sale prices ; Supply chains
  6. Source: CIE 2014 - 44th International Conference on Computers and Industrial Engineering and IMSS 2014 - 9th International Symposium on Intelligent Manufacturing and Service Systems, Joint International Symposium on "The Social Impacts of Developments in Information, Manufacturing and Service Systems" - Proceedings ; 2014 , p. 250-259
  7. URL: http://dl.acm.org/citation.cfm?id=1527658