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Showing 5 results for Stackelberg Game
Price Competition Between Two Leader-Follower Supply Chains, A Case Study
Mohammad Azari Khojasteh, Mohammad Reza Amin-Naseri, Isa Nakhai Kamal Abadi,
Volume 24, Issue 4 (12-2013)
Abstract

We model a real-world case problem as a price competition model between two leader-follower supply chains that each of them consists of one manufacturer and one retailer. T he manufacturer produces partially differentiated products and sells to market through his retailer. The retailer sells the products of manufacturer to market by adding some values to the product and gains margin as a fraction of the all income of selling products. We use a two-stage Stackelberg game model to investigate the dynamics between these supply chains and obtain the optimal prices of products. We explore the effect of varying the level of substitutability coefficient of two products on the profits of the leader and follower supply chains and derive some managerial implications. We find that the follower supply chain has an advantage when the products are highly substitutable. Also, we study the sensitivity analysis of the fraction of requested margin by retailer on the profit of supply chains.


Pricing decisions for complementary products of competitive supply chains
Amin Saghaeeian, Reza Ramezanian,
Volume 28, Issue 4 (11-2017)
Abstract

This study considers pricing, production and transportation decisions in a Stackelberg game between three-stage, multi-product, multi-source and single-period supply chains called leader and follower. These chains consist of; manufacturers, distribution centers (DCs) and retailers. Competition type is horizontal and SC vs. SC. The retailers in two chains try to maximize their profit through pricing of products in different markets and regarding the transportation and production costs. A bi-level nonlinear programming model is formulated in order to represent the Stackelberg game. Pricing decisions are based on discrimination pricing rules, where we can put different prices in different markets. After that the model is reduced to single-level nonlinear programming model by replacing Karush-Kuhn-Tucker conditions for the lower level (follower) problem. Finally, a numerical example is solved in order to analyze the sensitivity of effective parameters on price and profit.


EQUILIBRIUM FOR PROCUREMENT STRATEGY BETWEEN TRIAD COMPETITIVE SUPPLY CHAINS
Ahmad Makui, Mojtaba Soleimani Sedehi, Ehsan Bolandifar,
Volume 29, Issue 4 (12-2018)
Abstract

In today complex worldwide supply chains, intermediary organizations like Contract manufacturers and GPOs are mostly used. Well-known OEMs delegate their purchasing and procuring to these intermediaries. Because of their positive influence on supply chain efficiency, it is very important to investigate the role of intermediaries in today competitive supply chains. One important question arising about intermediaries is the conditions that the OEM controls his procurement or delegates this task to the intermediary organization?

To answer this question, this paper studies the equilibrium for component procurement strategies of two competing OEMs that produce substitutable products. Each OEM may either directly procure the input from the component supplier, or delegate the procurement task to the contract manufacturer. We analyze the OEMs’ procurement game under two contracting power schemes in such a supply chain: the supplier Stackelberg, where the component supplier acts as the Stackelberg leader, and the OEM Stackelberg, where the OEMs are the first movers.

We show that, the smaller OEM always prefers direct control of component procurement. This is because the OEM will receive a lower component price if the component supplier can price discriminate the OEMs. In contrast, the larger OEM’s preference depends on the contracting power scheme. Under the supplier Stackelberg, the larger OEM never prefers direct procurement; however, under the OEM Stackelberg, the larger OEM may have incentives to use direct procurement under reasonable conditions. This implies that a shift of the market power from the supplier to the OEMs may lead to more OEMs deviating from delegation to direct control.


Effect of Revenue Sharing Contracts in the Points Supply Chain of Coalition Loyalty Programs with Stochastic Advertising-Dependent Demand
Shahla Zandi, Reza Samizadeh, Maryam Esmaeili,
Volume 33, Issue 4 (12-2022)
Abstract
A coalition loyalty program (CLP) is a business strategy employed by for-profit companies to increase or retain their customers. One of the operational challenges of these programs is how to choose the mechanism of coordination between business partners. This paper examines the role of revenue sharing contracts in the loyalty points supply chain of a CLP with stochastic advertising-dependent demand where the program operator (called the host) sells loyalty points to the partners of the program. The purpose of the study is to examine the effect of this coordination mechanism on the decisions and profits of the members of the chain using the Stackelberg game method and determine whether the presence of revenue sharing contracts benefits the chain members when the advertising is done by the host and when the advertising cost is shared between the host and its partners. The results show that when the host gives bonus points to end customers (advertising), revenue sharing contracts become a powerful incentive for the profitability of the host and its partners. The findings provide new insights into the management of CLPs, which can benefit business decision-makers.
Efficient resource management and pricing in a two-echelon supply chain with cooperative advertising: A bi-level programming approach
Seyed Mahdi Aghazadeh, Hamid Farvaresh,
Volume 34, Issue 4 (12-2023)
Abstract
The growing online marketplace has opened a plethora of opportunities for businesses across various industries. Manufacturers, seeking to bypass intermediaries and directly reach end-users, have been increasingly adopting online sales channels in addition to their traditional retail sales. A key challenge, however, lies in determining optimal pricing strategies and advertising investments for both manufacturers and retailers while considering various constraints. This study contemplates a two-echelon supply chain model involving one manufacturer and two retailers. The manufacturer sells its product both through retailers (offline channel) and directly to consumers via an online channel. The model features both global and local advertising. The influence of global advertising is realized through distinct advertising channels, each with a unique impact on demand. To further motivate retailers, the manufacturer contributes to the cost of local advertising. In response to these challenges, this research formulates a bi-level model and employs the concept of Variational Inequalities to solve it. The model also contends with production capacity and budget constraints, leading to a Generalized Nash-Stackelberg game. The validity of the model and the efficacy of the solution method are assessed through numerical experiments performed. Finally, a set of valuable managerial insights are provided.

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