Competitive production scheduling: A two-firm, noncooperative finite dynamic game

Competitive production scheduling: A two-firm, noncooperative finite dynamic game

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Article ID: iaor19971863
Country: Netherlands
Volume: 68
Issue: 1
Start Page Number: 3
End Page Number: 31
Publication Date: Nov 1996
Journal: Annals of Operations Research
Authors:
Keywords: production, game theory
Abstract:

This paper studies the production scheduling problem in a competitive environment. Two firms produce the same product and compete in a market. The demand is random and so is the production capacity of each firm, due to random breakdowns. The paper considers a finite planning horizon. The scheduling problem is formulated as a finite dynamic game. Algorithms are developed to determine the security, hazard, and Nash policies. Numerical examples are discussed. A single-firm optimization model is also analyzed and it is observed that the production control policy from the single-firm optimization model may not perform well in a competitive environment.

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