The Equilibrium Decisions Of A Two-layer Supply Chain Network Based On Horizontal And Vertical Fairness Preference

With the market size growing and market competition increasing,people are paying more attention to the supply chain's researches.Existing researches have explored the impact of supply chain structure and supply chain member behavior.As the market structure becomes more complex,the number of members in the supply chain increases and the roles of members become diverse.Based on a traditional supply chain model of a manufacturer and a retailer,it is increasingly impossible to accurately reflect actual operational issues.The two-tier supply chain network is a common supply chain structure in reality.The upper layer is dominant,the lower layer is multiple followers,the upper and lower layers form a cooperative relationship,and the lower decision makers form a competitive relationship.Famous brands such as Apple and its retail stores are typical examples of a two-tier supply chain network structure.The decision of the leader and multiple followers affects their cooperative relationship and competitive relationship.Therefore,it is of great practical significance to study the equilibrium decision of the twotier supply chain network.At present,the research on the two-tier supply chain model is mostly based on the assumption of traditional economics.The decision-making behavior of decision makers only focuses on their own profits,which is completely rational and selfish.However,we have found through many social events that decision-makers are often influenced by psychological factors in decision-making.For example,the Wuchang rice incident,policy makers are willing to give up some profits in pursuit of fairness.Therefore,some scholars have combined the behavioral factors of decision makers with the supply chain model and get more realistic results,produced effective guidance.In the second-tier supply chain network model of this paper,the lower-tier retailers will generate horizontal fairness perception because of the imbalance of profits among the same-level competitors,and also generate vertical fairness perception because of the imbalance of profit distribution with the upper-level members.Therefore,this paper combines the fair behavior of retailers with the two-tier supply chain network,and establishes a model to discuss the impact of horizontal equity and vertical equity on decision outcomes.The upper level is a manufacturer and the lower level is a number of retailers and demand markets.Constructing a Stackelberg game model between different levels and a Nash non-cooperative game model between the lower retailers,The manufacturer sets the wholesale price to obtain the optimal profit.The retailers set the order amounts and the sales volumes to obtain the maximum utility.Through solving the model,the retailer makes the equilibrium decision under the horizontal and vertical fair behavior.According to the variational inequality theory and equilibrium theory,the equilibrium decision conditions of retailers considering fairness preference are obtained,and the equilibrium conditions of the whole lower retailer and demand market are further obtained.Finally,the penalty function method is used to solve the equilibrium conditions of the two-tier supply chain network,and numerical examples are analyzed.The effects of retailers' horizontal and vertical fairness preference weights and vertical fairness reference coefficients on each member's decision-making are discussed.The main research contents and innovations of this paper are as follows:(1)The existing research on fair concern behavior is mostly based on the one-to-one traditional supply chain structure,but as the market competition intensifies and the scale continues to increase,the multi-layer supply chain network has become a new focus.(2)The Stackelberg-Nash game model of a single manufacturer and multiple retailers is constructed to discuss the impact of horizontal and vertical double fairness on the equilibrium decision of each member of the two-tier supply chain network.According to the numerical analysis,it is discussed how the equilibrium decision is influenced by parameters such as horizontal fairness and vertical fairness preference,which provides a theoretical basis for decision-making in real life and has high reference value.