Competitive versus cooperative performances of a Stackelberg game between two suppliers

¹ Mechanical Engineering Laboratory, National Engineering School of Monastir, University of Monastir, National Engineering School of Monastir, Av. Ibn Eljazar, 5019 Monastir, Tunisia.
ibtissem.gahbiche@gmail.com; khaled.hadjyoussef@gmail.com; abdel.dogui@enim.rnu.tn
² OASIS Laboratory, University of Tunis El Manar, Tunisia.
³ Industrial Engineering Laboratory, École Centrale Paris, Grande voies des vignes, 92290 Chatenay-Malabry, France.

Received: 15 May 2015
Accepted: 26 July 2016

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.