Manufacturer-retailer supply chain coordination: A bi-level programming approach

Authors:
Ali Naimi Sadigh;Marzieh Mozafari;Behrooz Karimi
Affiliations:
Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, 424 Hafez Ave., Tehran 15916-34311, Iran;Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, 424 Hafez Ave., Tehran 15916-34311, Iran;Department of Industrial Engineering and Management Systems, Amirkabir University of Technology, 424 Hafez Ave., Tehran 15916-34311, Iran
Venue:
Advances in Engineering Software
Year:
2012

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Abstract

This paper investigates a multi-product manufacturer-retailer supply chain where demand of each product is jointly influenced by price and advertising expenditure. We propose a Stackelberg game framework under two power scenarios. In the first, we consider the traditional approach where the manufacturer is the leader. In the latter, we allow the retailer to act as the dominant member of the supply chain. Bi-level programming approach is applied to find the optimal equilibrium prices, advertising expenditures and production policies; then several solution procedures, including imperialist competitive algorithm, modified imperialist competitive algorithm, and evolution strategy are proposed. Finally numerical experiments are carried out to evaluate the effectiveness of models as well as solution procedures.