Abstract:

Considering a supply chain network consisting of n manufacturers and 2 retailers, under the assumption that the products produced by different manufacturers are homogeneous and the demand of each kind of product is dependent on its inventory and influenced by the inventories of other products at the same retailer and another retailer, three decision models of supply chain network were studied respectively such as the equilibrium problem with equilibrium constrains when each agent tries to make decentralized decisions to maximize his own profit. Nash equilibrium model when each manufacturer is dominant and tries to make centralized decisions to maximize the profit of his brand, Nash equilibrium model when each retailer is dominant and tries to make centralized decisions to maximize the profit of his channel. The equilibrium states of three cases were put forward. It shows that the order quantities under decentralized model is lowest, so that the profits of each brand under decentralized model is lower than those under brand-profit-maximization model, and the profits of each channel under decentralized model is lower than those under channel-profitmaximization model. Two buy-back contracts are put forward respectively to coordinate the retailers in decentralized supply chain to choose the same order quantities under brand-profit-maximization model and under channel-profitmaximization model. Final numerical example proves the reasonability of models and validity of coordinative contracts. 

Key words:  supply chain network; inventory-dependent demand; Equilibrium Problem with Equilibrium Constrains (EPEC); Nash equilibrium