Optimising the supply and demand decisions in high-end equipment manufacturing based on Stackelberg game

Abstract

High-end equipment is manufactured using a "main manufacturer–supplier" mode. The supply–demand relationship of high–end equipment involves benefit conflicts among the customer, the main manufacturer, and multiple suppliers, so transaction decisions become very complicated. Traditional optimisation methods are inadequate at revealing the interactions among multiple stakeholders. In this study, based on the transaction process of high-end equipment manufacturing, two correlated Stackelberg game models, namely, "main manufacturer–customer" and "main manufacturer–supplier," are constructed and their Nash equilibria are solved to maximize the profit of each stakeholder. The effects of various parameters on the decision variables of each stakeholder are analyzed through numerical simulation.