Two-echelon supply chain games in a fuzzy environment

Authors:
Chenxi Zhou;Ruiqing Zhao;Wansheng Tang
Affiliations:
Institute of Systems Engineering, Tianjin University, Tianjin 300072, China;Institute of Systems Engineering, Tianjin University, Tianjin 300072, China;Institute of Systems Engineering, Tianjin University, Tianjin 300072, China
Venue:
Computers and Industrial Engineering
Year:
2008

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Abstract

This paper considers a supply chain composed by a manufacturer and a retailer. It is assumed that the supply chain is operated in a fuzzy environment. The fuzziness is associated with the customer's demand and the manufacturing cost. Two different game structures of the supply chain are considered: the manufacturer and the retailer cooperate with each other and behave as an integrated-firm; the manufacturer behaving as a Stackelberg leader dominates the supply chain. Expected value models as well as chance-constrained programming models are developed to determine the pricing strategies for the retailer and the manufacturer. Finally, a numerical example is given to illustrate the effectiveness of the proposed supply chain models.