Volume 52, Number 3, July–September 2018
|Page(s)||725 - 742|
|Published online||14 September 2018|
Supply chain models with imperfect quality items when end demand is sensitive to price and marketing expenditure
Department of Applied Sciences and Humanities, Dronacharya College of Engineering,
2 Apaji Institute of Mathematics and Applied Computer Technology, Banasthali University, Rajasthan, India
3 Department of Mathematics, Amity School of Engineering and Technology, Bijwasan, New Delhi, India
* Corresponding author: mittal firstname.lastname@example.org
Accepted: 31 January 2018
This paper studies supply chain model for imperfect quality items under which unit price and unit marketing expenditure imposed by the buyer, regulates the demand of the item. It is presumed that with the accustomed supply chain model, all produced items are of good quality, coincidentally, it engrosses some percentage of defective items. Thus, inspection process becomes essential for the buyer to segregate the defective items, which are then sold at discounted price at the end of the screening process. In this paper, a supply chain model is ensued to substantiate the interaction and democracy of the participants in the supply chain, the buyer and seller, is pitched by non-cooperative and cooperative game theoretical approaches. In the non-cooperative method, the Stackelberg game approach is used in which one player behaves as a leader and another one as a follower. The co-operative game approach is based on a Pareto efficient solution concept, in which both the players work together to enhance their profit. Lastly, to demonstrate the significance of the theory of the paper, numerical examples including sensitivity analysis are presented.
Mathematics Subject Classification: 90B05 / 90B06
Key words: Supply chain / imperfect quality items / game theory / non-cooperative games / cooperative games
© EDP Sciences, ROADEF, SMAI 2018
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