Analysis Of Supply Chain Of Single Supplier And Single Manufacturer Based On Bounded Rationality

Recently, there are more and more studies about supply chain based on game theory,but most of the study is based on expected utility theory, that is to say, the players in the game are perfectly rational. However, with the study deeper and deeper, people find that there are lots of practical problems which can not be well explained in this way. In order to avoid this disadvantage, in this paper we will fully consider the uncertainty of market demand and the bounded rationality of player. We will introduce the risk factors of the player and the prospect theory to study a class of problems in the supply chain respectively. The rest of the paper is organized as follows:In the first chapter, we will introduce the background and review the related literature.Secondly, we consider the risk attitude of the decision analysis of a single supplier and a single manufacturer. We will consider the supply chain system composed of a single supplier and a single manufacturer under the condition of the fully spot market, as well as the demand fully uncertainty of the market. we will introduce the risk factors of the player in the model, establish the Stackelberg game which is dominated by the supplier,and prove the existence and uniqueness of the equilibrium solution. At the end of this part we will make some correlation analysis about the strategy choice of the model.The third chapter, analysis based on the bounded rationality of the manufacturers’ purchase behavior. We also consider the supply chain system composed of a single supplier and a single manufacturer under the condition of the fully spot market. We will use expected utility theory and prospect theory to solve the optimal contract quantity of the supply chain system respectively, so people can use the formulation which we have done to guide such purchasing behavior in real life.