Article ID: | iaor201110555 |
Volume: | 135 |
Issue: | 1 |
Start Page Number: | 144 |
End Page Number: | 153 |
Publication Date: | Jan 2012 |
Journal: | International Journal of Production Economics |
Authors: | Tang Wansheng, Wei Jie, Zhao Jing |
Keywords: | stochastic processes, game theory |
This paper studies the pricing problem of substitutable products in a supply chain with one manufacturer and two competitive retailers. The consumer demands and manufacturing costs are of uncertainty, which are described by fuzziness. Based on different market structures, one centralized pricing model and three decentralized pricing models are developed, and the corresponding analytical equilibrium solutions are obtained using the game‐theoretic approach. Finally, numerical examples are presented to illustrate the effectiveness of the theoretical results, and to gain additional managerial insights.