Abstract

Defects from various sources in the multi-layered supply chain network cause additional cost to deliver products to customers. Although a great deal of methodologies have been proposed, there exit a few research which consider the conflictual relationship between suppliers and retailers. This paper presents an economic contract model for finding optimal acceptance sampling plans between suppliers and retailers using Stackelberg game. For each players in quality control game, the payoff functions are devised by considering both cases rejecting or accepting incoming lot based on the result of acceptance sampling. Numerical studies illustrate and provide insights of the proposed approach.

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