A Fictitious Play algorithm applied to a retailer's replenishment decision problem in a two‐echelon supply chain

Fictitious Play (FP) concept, based on Game Theory, can be used for developing models to characterise conditions in supply chain. The focus of this paper is on using an FP algorithm as a learning methodology to analyse performance of a two‐echelon supply chain, highlighting one‐echelon retailers' processes for making decisions about replenishments. FP methodology has not been applied well to supply chain conditions. This paper provides an approach using FP to analyse retailers' two‐echelon supply chain problems to create equilibrium policies to improve systems' performance.