Optimal coordination strategy of dynamic supply chain based on cooperative stochastic differential game model under uncertain conditions

Abstract

The optimal coordination strategy is achieved when the dynamic supply chain profit is maximized. The profit of dynamical supply chain is decided by the corresponding effort level of each node enterprise. This paper presents a cooperative stochastic differential game model to research the optimal coordination strategy of a dynamic supply chain under uncertain conditions and studies how to coordinate the effort level of node enterprise to maximize supply chain profit. For this purpose, a cooperative stochastic differential game model of the enterprises’ effort level is constructed, and the optimal solution of the model is solved by converting it to the solution of the equivalent stochastic partial differential equation. As a result, the optimal strategy of a local node enterprise is achieved. Considering the gap between the independent decision of each node enterprise and the optimal decision of the supply chain system, the coordination mechanisms of the dynamic supply chain, including the temporary static allocation mechanism and the compensation mechanism, are given to narrow the gap to achieve the optimal coordination strategy under uncertain conditions.