Collaborative bargaining solution in tandem supply chain through cooperative game theoretical approach

Abstract

There are many studies about negotiation procedures for contract problems in supply chains. Several recent papers have considered a new negotiation procedure for a repurchase contract problem in a supply chain consisting of a manufacturer and a retailer. There, usually, are some wholesalers between a manufacturer and a retailer. Therefore, a supply chain including some wholesalers in addition to a manufacturer and a retailer should be considered. In this study, we call the supply chain in which three or more members are arranged in series the tandem supply chain. We, firstly, address a negotiation problem for a contract about wholesale and repurchase prices in the tandem supply chain in which three members, that is, a manufacturer, a wholesaler and a retailer are arranged in series. The whole contract in the tandem supply chain is composed of two contracts dependent mutually, i.e., the contract between the manufacturer and wholesaler and the contract between the wholesaler and retailer. The collaborative bargaining solution in the tandem supply chain consisting of three members is discussed. This paper, finally, formulates the tandem supply chain including several wholesalers.