A Game Theory Approach for Supply Chain Coordination Model with Incentive Mechanisms of Discount and Delay in Payments

Subject Areas : Industrial Management

mohammad ferdousmakan ¹ ( Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Najafabad, Iran )
Roya M.ahari ² ( Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Najafabad Iran )
Mohammadreza Vasili ³ ( Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Najafabad, Iran )
Majid Vaziri Sarashk ⁴ ( Department of Industrial Engineering, Najafabad Branch, Islamic Azad University, Najafabad, Iran )

Received: 2023-11-15 Accepted : 2024-01-30 Published : 2024-01-21

Keywords: Decentralized model, Incentive mechanisms, Supply Chain, coordinated model, Game Theory,

Abstract :

Uncertainty in the supply chain is considered as a fundamental and important issue in order to make appropriate decisions for supply chain managers and designers. In this article, in order to deal with this issue, a three-level supply chain under random demand is proposed using two decentralized and coordinated models, in which the profit increase of each actor in the chain (supplier-manufacturer-retailer) considered. In the decentralized model under the scenario-based stochastic demand, the retailer and the manufacturer separately decide on the order quantity and investment by considering the scenario-based stochastic CSR-sensitive demand. A wholesale price contract with two adjustable levels is proposed to persuade three levels to enter into a coordination scheme. According to the comparisons made between the results of the algorithms, it was found that the coordinated model performed better than the other algorithm in reducing chain costs and increasing profits. In particular, it can be acknowledged that the coordinated model performed better than the decentralized model by about 144.39% and was able to increase the profit of the chain.

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