Research Of Inventory Optimization In Supply Chain Based On Game Theory

The management of supply chain comes from the management of logistics. With the development of world economy, the management of supply chain have become to the important model for corporation. And the inventory management is an important part of the management of supply chain. Because the inventory restrict the cost of not only one corporation, but also all supply chain. So it is important to know that how to harmonize the relationship of supply chain, and to rise the benefit of inventory management.But there are several corporations in supply chain, and every corporation is independence, have its own target value. The corporations in supply chain were fragmented. Supply chain members need to establish some contracts which is correlation between each other, to make decentralized local optimum under the control of supply chain performance achieve collect local optimum under the control of the supply chain performance. Generally speaking, it requires that the leading supply chain to provide correlative incentives to urge the harmonization of the whole supply chain management.The research of this paper based on game theory, using the Stackelberg game model to provide the appropriate decision-making for two different companies (manufacturers and vendors) in supply chain. The research has two points of view, delay in payments strategy and quantity discounts strategy. And get different optimum for manufacturers and vendors strategies under delay in payments strategy and quantity discounts strategy.Finally, analyzing the two optimum models through examples, and getting the following conclusions: under the delay in payments strategy, with income and expenditure of interest rates getting close, the optimal extension of the payment period will increase, and as manufacturers increase the deferred payment period, all members and the whole supply chain will increase profits, but inventory costs of supply chain will be lower; under the quantity discounts strategy, the changes of price elasticity coefficient have an important influence to selling price(including wholesale price and retail price) ,order quantity and the profits of every member in supply chain. With the increase in the price factor, the selling price, order quantity and the profits of every member in supply chain will be lower, and with manufacturers to reduce wholesale prices (quantity discounts), costs of supply chain inventory decreased.