Uncertain Supply Chain Problem with Price and Effort

Abstract

A two-echelon supply chain problem influenced by retail price and sales effort is investigated in this paper, in which the demand, manufacturing cost and sales effort elasticity are considered as uncertain variables. Centralized decision model and decentralized decision model based on information about retailer’s scale parameter are presented, and the optimal solutions are obtained by game theory. In addition, two coordination models under symmetric and asymmetric information situations are developed. Furthermore, the parameters are treated as fuzzy variables and the results prove that fuzzy theory can be used to construct efficient models as well. Numerical examples indicate that the profit of the entire supply chain in two coordination situations are greater than that in the without coordination situation. What’s more, the consumers have to face a higher retail price when under symmetric information situation.