Development of Supply Chain Strategy in Iranian Automotive Industry Based on System Dynamics and Game Theory

Abstract

Supply chain is a system involved in moving a product or service from supplier to customer. Since the supply chain in a company includes all responsibilities and operations of the company, its designing is necessarily a complete part of strategic planning procedure of the company. This paper intends to develop supply chain strategy through such tools as system dynamics and game theory. In this research, we have first identified key and principal variables of the supply chain to draw the causal diagrams with feedback loops. Then the layer and rate variables were identified, layer and flow models were created and by writing equations the simulation model is implemented for 10 years. The review of automotive industry, four main aspects is selected for programming. The issue of selecting best combination of strategy as a game with four players is considered in which each player can select three strategies. Then, the Shapely Value is used, the influence of each player in creating desirability is measured and by creation of the decision tree the best strategy combination is achieved. The results of this study showed that automotive part makers will have the greatest impact on the future of the automotive industry in Iran.