Profit allocation games in supply chains

Petr Fiala ()
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Petr Fiala: University of Economics

Central European Journal of Operations Research, 2016, vol. 24, issue 2, No 2, 267-281

Abstract: Abstract The paper considers a supply chain where a number of agents are connected in some network relationship. Game theory is a very powerful framework for studying decision making problems, involving a group of agents in a supply chain. Allocation games examine the allocation of value among agents connected by a network. The ongoing actions in the supply chain are a mix of cooperative and non-cooperative behavior of the participants. The paper proposes a two-stage procedure for profit allocation based on combination of non-cooperative and cooperative game approaches. In the first stage, retailers meet customer price-dependent stochastic demand and seek to maximize total profit from the sale. Retailers are trying to align goals with producers on a contract basis and share the total profit with them. In the second stage, the cooperating producers allocate individual profits.

Keywords: Supply chain; Game theory; Allocation; Cooperation; Non-cooperation (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10100-015-0423-6

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