Nash Game Model for Optimizing Market Strategies, Configuration of Platform Products in a Vendor Managed Inventory (VMI) Supply Chain for a Product Family

This paper discusses how a manufacturer and its retailers interact with each other to optimize their product marketing strategies, platform product configuration and inventory policies in a VMI (Vendor Managed Inventory) supply chain. The manufacturer procures raw materials from multiple suppliers to produce a family of products sold to multiple retailers. Multiple types of products are substitutable each other to end customers. The manufacturer makes its decision on raw materials’ procurement, platform product configuration, product replenishment policies to retailers with VMI, price discount rate, and advertising investment to maximize its profit. Retailers in turn consider the optimal local advertising and retail price to maximize their profits. This problem is modeled as a dual simultaneous non-cooperative game (as a Nash game) model with two sub-games. One is between the retailers serving in competing retail markets and the other is between the manufacturer and the retailers. This paper combines analytical, iterative and GA (genetic algorithm) methods to develop a game solution algorithm to find the Nash equilibrium. A numerical example is conducted to test the proposed model and algorithm, and gain managerial implications.supply chain management;nash game model;vendor managed inventory

Equilibrium analysis in multi-echelon supply chain with multi-dimensional utilities of inertial players

In a supply chain, the importance of information elicitation from the supply chain players is vital to design supply chain network. The rationality and self-centredness of these players causes the information asymmetry in the supply chain and thus situation of conflict and non-participation of the players in the network design process. In such situations, it is required to analyse the supply chain players’ behaviour in order to explore potential for coordination through incentives. In this paper, a novel approach of social utility analysis is proposed to elicit the information for supply chain coordination among the supply chain players in a dyadic relationship – supplier and buyer. In principal, we consider a monopsony situation where buyer is a dominant player. With the objective of maximizing the social utility, efforts have been made to value behavioural issues in supply chain. On the other hand, the reluctance of player due to the information asymmetry is measured in the form of inertia – an offset to the supply chain profit. The suppliers’ behaviour is analysed with three distinct level of risk for two types of the product in procurement process. The useful insight from this paper is in supplier selection process where the reluctance of supplier offsets supply chain profit. The paper provides recommendations to supply chain managers for efficient decision-making ability in supplier selection process

Modeling subsidy transfer in cooperative advertising using Stackelberg game theory

Dynamic game theoretic model approach stands out as a choice tool for considering subsidy transfer in cooperative advertising. In spite of the benefits of static models they are not known to have been used to study subsidy transfer. This work studies cooperative advertising subsidy transfer in a three-level manufacturer-distributor-retailer supply channel using Stackelberg static game. The retailer is directly involved in local advertising, while the manufacturer indirectly participates in retail advertising by providing subsidy to the retailer through the distributor. The work models the demand function using the effect of advertising on demand, and models the payoff using a revenue-expenditure formula. It considers four channel structures, and obtains the optimal advertising effort, the optimal participation rates, and the payoffs for each scenario. The work observes that the payoffs are large with distributor’s intervention subsidy, but best with subsidy transfer. They are worst with non-provision and non-transfer of subsidy. Thus, the supply channel members should prioritize the distributor’s participation in retail advertising either through subsidy transfer or intervention

Research on Cooperative Advertising Decisions in Dual-Channel Supply Chain Under Asymmetric Demand Information When Online Channel Implements Discount Promotion

This paper analyzes the both online-channel price discount and advertising decisions in a dual-channel supply chain involved one manufacturer and one retailer. A Stackelberg game dominated by the manufacturer is established. The influence of asymmetric demand information is analyzed. The study shows that retailer has a motivation to lie about the offline demand information and it always announces a higher advertising impact factor. To induce the retailer to reveal to true demand information, a franchise-fee contract is designed

Supply chain collaboration and sustainable development goals (SDGs). Teamwork makes achieving SDGs dream work

The global push towards sustainable development has led to an upsurge in academic literature at the juncture of supply chain collaboration (SCC) and sustainability. The present paper aims to map this growing literature to understand how SCC can contribute to the achievement of broader Sustainable Development Goals (SDGs). Via a systematic review of literature (SLR), the paper maps key themes at the intersection of SCC and sustainable development. Relying on nine key themes, the study presents novel insights into the domain of SCC for sustainable development. The results of the SLR reveal that collaborative innovation, collaborative process and product development are key mechanisms driving SCC. However, the extant literature has not devoted much attention to the effectiveness of SCC mechanisms or their performance. Further, the current study posits that more effective SCC strategies can boost the sustainable operational performance of the supply chain (SC) by enhancing capacity building and resource utilisation. Based on the contingency approach, this study offers a novel framework linking SCC to SDGs. The study thus has the potential to help managers and practitioners identify strategic fields of action for achieving SDGs.publishedVersionPaid open acces

Supply chain collaboration and sustainable development goals (SDGs). Teamwork makes achieving SDGs dream work

The global push towards sustainable development has led to an upsurge in academic literature at the juncture of supply chain collaboration (SCC) and sustainability. The present paper aims to map this growing literature to understand how SCC can contribute to the achievement of broader Sustainable Development Goals (SDGs). Via a systematic review of literature (SLR), the paper maps key themes at the intersection of SCC and sustainable development. Relying on nine key themes, the study presents novel insights into the domain of SCC for sustainable development. The results of the SLR reveal that collaborative innovation, collaborative process and product development are key mechanisms driving SCC. However, the extant literature has not devoted much attention to the effectiveness of SCC mechanisms or their performance. Further, the current study posits that more effective SCC strategies can boost the sustainable operational performance of the supply chain (SC) by enhancing capacity building and resource utilisation. Based on the contingency approach, this study offers a novel framework linking SCC to SDGs. The study thus has the potential to help managers and practitioners identify strategic fields of action for achieving SDGs.publishedVersio

Coordinating Pricing and Ordering Decisions in a Multi-Echelon Pharmacological Supply Chain under Different Market Power using Game Theory

Abstract The importance of supply chains in pharmacological industry is remarkable so that nowadays many pharmacological supply chains have an effective and critical role for supplying and distributing drugs in health area. So, this article studies a three-echelon pharmacological supply chain containing multi-distributor of raw materials, a pharmaceutical factory, and multi-drug distributors companies. The distributors of raw material order raw materials of some drugs to own suppliers and sell them to the pharmaceutical factory. The factory transmutes raw materials to the several finished products and sells them to some drug distributors companies. There are several types of raw materials and finished products. Here, it is supposed that the market powers of partners are different. So, the Stackelberg game among the members of the chain is deemed to analyze the coordination behavior of the members of the proposed chain. The aim of the research is to maximize the total profit of supply chain by employing the optimal pricing and ordering decision policies where the order quantities of the distributors and the selling prices of pharmaceutical factory (manufacturer) and the distributors are the decision variables. Besides, the closed form solutions of the decision variables are presented. At the end, numerical example and some sensitivity analysis are presented

Nash game model for optimizing market strategies, configuration of platform products in a Vendor Managed Inventory (VMI) supply chain for a product family

This paper discusses how a manufacturer and its retailers interact with each other to optimize their product marketing strategies, platform product configuration and inventory policies in a VMI (Vendor Managed Inventory) supply chain. The manufacturer procures raw materials from multiple suppliers to produce a family of products sold to multiple retailers. Multiple types of products are substitutable each other to end customers. The manufacturer makes its decision on raw materials' procurement, platform product configuration, product replenishment policies to retailers with VMI, price discount rate, and advertising investment to maximize its profit. Retailers in turn consider the optimal local advertising investments and retail prices to maximize their profits. This problem is modeled as a dual simultaneous non-cooperative game (as a dual Nash game) model with two sub-games. One is between the retailers serving in competing retail markets and the other is between the manufacturer and the retailers. This paper combines analytical, iterative and GA (genetic algorithm) methods to develop a game solution algorithm to find the Nash equilibrium. A numerical example is conducted to test the proposed model and algorithm, and gain managerial implications. © 2010 Elsevier B.V. All rights reserved.postprin

Strategic integration decision under supply chain competition in the presence of online channel

This study explores the pricing decisions of substitutable products for two competing supply chains in the presence of an online channel. Each supply chain consisting of a single manufacturer and an exclusive retailer and one of the manufacturers distributes products through the online channel. We examine optimal decisions under five scenarios to explore how the strategic cooperation between two manufacturers at the upstream horizontal level or with the retailer at the vertical level affects product pricing decisions and the performance of two supply chains? The results reveal that decisions for cooperation with competing manufacturers and opening an online channel are correlated. In the absence of an online channel, cooperation with their respective retailer can lead to a higher supply chain profit. However, if a manufacturer opens an online channel, then cooperation with competing manufacturers can lead to a higher supply chain profit. Under the vertical integration, total supply chain profit might be lower compared to a scenario where members in each supply chain remain independent. Consumers also need to pay more for products