Study Of Optimal Decision-making In Supply Chain Coordination Among Entities

With the complication and diversification of the production and manufacture, single enterprise can not carry out the overall process of the market management. Therefore, supply chain, which consists of several complementary entities, becomes the fundamental unit of the market management. Then, how to coordinate the internal relationship among supply chain entities and acquire the optimal profit becomes a urgent problem. Supply chain coordination is an important issue of the study of supply chain to optimize the supply chain.Aiming to the optimal descision of entities in the process of supply chain coordination, four issues are studies in this paper.First, supply entity coalition is regard as a coordination mechanism. The coalition stability condition of the two-stage supply chain, which consistis one supplier and mutiple retailers, is study by using game therom and engineering mathematics. Finally, The boundary market conditions and the optimal decisions of the supply chain entities is obtioned, and several meaningful insights is written as follows: When the market price sensitivity coefficient T is fixed, dealers coalition tend to be stable, with the increasing of the value of substitution rate k in a reasonable; the supplier’s optimal wholesale price remains the same before and after dealer’s coalition, but dealers’ coalition causes the demand decrease, which leads to supplier’s profit reducing.Second, based on the above supply chain model, the horizontal coalition constructure of the retailers is stuied, and the general form of the stable coalition constructure, namely the equal structures or approximate equal structures. Menwhile, following conclusion is acquierd: with supplier’s cost increasing, the size of the distributors’ alliances will also increase.Then, a two-stage supply chain model which consists of one supplier and two manufucturers is established. Three different coalition constructures among these entities in above model is analysised using vertical Stackelberg game and horizontal Nash game, and the boundary market conditions and the optimal decisions of the supply chain entities is obtioned, and several meaningful insights is written as follows: under the boundary condition, the coalition constructures have the equal profit; great coalition is always the optimal coalition constracture; whether the manufacturers ally with each other or not, the wholesale price of the supplier will not change; the manufacurers whose cost is fewer will acquire more profit.Finally, a dynamic supply chain decision–making model whose demand is time-varying was built based on product diffusion model. Then, the optimal decisions and profits of all entities of the supply chain were acquired by using Stackelberg game. Simultaneously, the old product’s exiting from the market was regarded as a further optimization of the supply chain. Some insights have been derived. For example, if supplier and retailer adopt their optimal pricing-strategy respectively, supplier’s profit is twice as retailer’s; the growth rate of retail price and wholesale price of two generations of products are opposite number; the profits of all entities increase if old product’s exiting strategy is executed.The studies above deeply analyze the supply chain entities coordination which is regard as coordination mechanism. These studies involve in the fields from static supply chain to dynamic supply chain, from one generation product to two generations product, which can be regard as the improvement of the supply chain coordination research. The supply chain models of this paper are similar to IT supply chain, automobile supply chain, and franchise supply chain, and have some significance for real coordination and decision-making among entities in supply chain.