Abstract
This paper develops two-echelon supply chain models with a manufacturer who supplies a single product to two competitive retailers. A manufacturer-Stackelberg structure is assumed between the two echelons in a two-echelon supply chain. Optimal decision models under decentralized- and integrated systems are respectively developed, and a closed-form solution to each system is derived. Unlike the existing literature related to this issue which adopts a linear-demand function, this paper analyzes the effects of duopolistic retailers’ competitive behaviors-Cournot, Stackelberg and Collusion-on the manufacturer’s and the duopolistic retailers optimal decisions by adopting a non-linear demand function. Through a comparison of the results under linear- and nonlinear- demand, this paper shows that the results vary (or are even reversed) with the different demand functions adopted. Finally, this paper discusses the channel coordination between the manufacturer upstream and the retailers downstream.
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