Analysis On Chain-to-chain Competition Under The Supply Disruption Based On The Game Theory

With the development of economic globalization and market competition becomesmore and more intense, the competition form is evolving from the competition amongfirms to the competition among supply chains.The supply chain management has beenmore successful in many enterprises after years of exploration and development. Inrecent years, along with global procurement, non-core businesses outsourcing, singlesourcing supply and lean supply, the supply chain becomes longer and longer in space,shorter in time, these changes makes the uncertainty of the supply chain, in addition tothe increasing number of natural and man-made disaster events, the uncertainty ofsupply chain is higher and higher, the range is wider and wider, the supply chain is alsobecoming more and more fragile. In this paper, we consider the impact of supplydisruption on chain-to-chain competition. In three different cases, we discuss thedecision-making problems of pricing and order between supply chains.In the first condition of asymmetric information, we analyse the problem ofquantity competition between a supplier and a retailer, the retailer know all their ownsupply chain information but only understand competitor’s quantity distribution function.We also examine the optimal order quantity and expected revenue in the three cases ofcoordinated competition game, hybrid competition game, uncoordinated competitiongame, and discuss the decisions of the suppliers and retailers under the revenue sharingcontract and reward-penalty contract. We can obtain: under the condition of one supplychain has a given strategy, the supply chain’s profit is maximum when the other onechoose supply chain cooperation, so the supply chain cooperation for each of the supplychain is the optimal decision, in the long run, cooperation is the only balance. From theexpectations of the market supply, the coordinated competition game brings to thecustomer’s satisfaction is the largest, hybrid competition game times, worstuncoordinated competition game. Cooperation, therefore, can make the market price islower and benefit the customer more.In the second condition, we analyse the impact of demand uncertainty onchain-to-chain competition. In the first place, Retailer decides whether to cooperate withsupplier; If retailer chooses cooperation with supplier, the assumption that they use therevenue-sharing contract，the revenue sharing parameter is decided by retailers,thesupply chain is in the coordination state at this time. If retailer dose not choose cooperation with supplier, the assumption that they use the wholesale price contract，thewholesale price is decided by supplier,the supply chain is in the uncoordination state atthis time and Steinberg game between retailers and suppliers. Under the structure ofcoordinated competition, hybrid competition and uncoordinated competition, we obtainthe condition of optimal wholesale price, the expression of the optimal order quantity bytwo retailers, the impact of the supply reliability parameters and wholesale price on theoptimal order quantity. Only when revenue sharing coefficient is in a certain rangecould the supply chain coordinate. Finally, by the numerical analysis, we obtain theinfluence of various parameters on the optimal order quantity and managementimplications.In the third condition, we discuss the impact of cost disruption caused byemergencies on supply chain enterprise, we also analyse the problem of Bertrand gamebetween two supply chains and optimal pricing and ordering strategy in the presence ofmanufacturing cost disruption. And we also analyze the optimal adjustment strategiesunder different parameter ranges. We find only when the cost disruption exceeds somekind of threshold will the supply chains alter their ordering and pricing decisions,furthermore, the quantity and pricing have some robustness property. Finally, we verifythe conclusions by numerical computations.