Abstract:

For a supply chain system formed by one manufacturer and a number of competitive multi-retailers, the problems about the optimal brand advertising investment and local advertising allowance of the manufacturer as a leader, and the optimal local advertising investment and ordering policy of numerous competitive retailers as followers were studied when the demand was uncertain. Stackelberg game model about cooperative advertising were given, and the existence of equilibrium solution was proved, then the algorithm for solving optimization model was put forward. Finally, a numerical exemplification was carried out based on one manufacture and two retailers, and influence caused by parameter variances on the optimal strategy was analyzed.

Key words: supply chain; cooperative advertising; stackelberg game