A Game-Theoretical Capacity Allocation Scheme Design under Seasonal Demand

Jian Zhou; Ting Fang; Zhao Wei Wang

doi:10.4028/www.scientific.net/AMR.798-799.902

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HomeAdvanced Materials ResearchAdvanced Materials Research Vols. 798-799A Game-Theoretical Capacity Allocation Scheme...

A Game-Theoretical Capacity Allocation Scheme Design under Seasonal Demand

Abstract:

In this paper, we study capacity allocation under seasonal demand in two-echelon supply chain. In this supply chain the supply and demand is seriously out-off-balance. In detail the capactiy of the supplier decreases in high-demand state while the capacity can be fully released in low-demand state. Hence a game-theoretical capacity allocation scheme is proposed to increase retailers’ orders in low-demand state. This allocation scheme based on turn-and-earn uses orders in low-demand state to allocate capacity in high-demand state. Our competitive game is base on Nash equilibrium. A contract based on Nash equilibrium is designed to guarantee a reasonable allocation of interests between the supplier and retailers by changing incentives. We show that turn-and-earn allocation does coordinate the system and with cooperation both the supplier and the retailer can both benefit from it. A numerical study is conducted.

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Periodical:

Advanced Materials Research (Volumes 798-799)

Pages:

902-906

DOI:

https://doi.org/10.4028/www.scientific.net/AMR.798-799.902

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Online since:

September 2013

Authors:

Jian Zhou, Ting Fang, Zhao Wei Wang

Keywords:

Capacity Allocation, Contract, Nash Equilibrium, Seasonal Demand

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References

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