Competitive versus cooperative performances of a Stackelberg game between two suppliers

Zied Jemai (), Ibtissem Ernez-Gahbiche, Khaled Hadjyoussef and Abdelwaheb Dogui
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Zied Jemai: LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec
Abdelwaheb Dogui: LGM / ENIM - Laboratoire de Génie Mécanique [Monastir] - ENIM - École Nationale d’Ingénieurs de Monastir - UM - Université de Monastir - University of Monastir

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Abstract: We investigate the competitive and cooperative performances of a supply chain with two capacitated suppliers solicited by a customer who offers a new product procurement suggestion. Suppliers have the option to accept or reject the new product offer according to its profitability. In addition, suppliers have to decide on their base stock levels. We classify suppliers as principal and secondary. The customer usually addresses demand to the principal supplier at first. We consider two schemes: in the first scheme, the principal supplier informs the customer about the demand ratio he wants to be allocated. The customer allocates the remaining quantity to the secondary supplier. In the second scheme, the principal supplier decides to respond to the entire demand and to subcontract a part of it to the secondary supplier. In the competitive situation, we give conditions that allow principal supplier to select the best scheme. We show that the new product offer can be refused while it is accepted when suppliers cooperate. We present a profit allocation policy under which collaboration is beneficial for the two suppliers. Mathematics Subject Classification. 90B50.

Date: 2016-10
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Published in RAIRO - Operations Research, 2016, 50 (4-5), pp.767 - 780. ⟨10.1051/ro/2016050⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01672385

DOI: 10.1051/ro/2016050

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