Interdependent order allocation in the two-echelon supply chain using agent-based negotiation

Abstract

Nowadays, many researches study the negotiation-based order allocation problem in the supply chain environment, aiming to improve the efficiency of the allocation and the profits of the supply chain members. The competition and cooperation in supplier's side are mainly addressed because of independent orders. In this paper, we analyze an interdependent order allocation problem in a two-echelon supply chain. The supply chain consists of a manufacturer echelon and a supplier echelon. Due to the interdependence, both the competition and cooperation in the manufacturer echelon are addressed. An agent-based negotiation algorithm is developed to support the order allocation process and the conflicts resolution. We show in experiments that orders under various supply chain contexts can be successfully allocated through the algorithm.