Game theoretic pricing and ordering decisions with partial lost sales in two‐stage supply chains

Few papers have studied the optimal pricing and ordering with partial lost sales from a two‐stage game theoretic perspective. This paper considers a supply chain game with a buyer and a seller through pricing and ordering models with partial lost sales. We evaluate the optimal solutions for the buyer and the seller and provide insights into both the deterministic and stochastic demand models. We also propose search algorithms to obtain the global optimum when convexity and concavity conditions are not satisfied.