Input Quantity Decision Competition Between Two Suppliers For One Manufacturer Under Yield Uncertainty

With the development of the society and the progress of the technology,more and more products are facing the competition between congeneric products form different brands.Especially in the field of innovative products,in addition to the fierce brand competition,many enterprises are also facing the risk of yield uncertainty.Based on the consideration of practical problems,this paper studies the input quantity decision competition between two suppliers for one manufacturer under yield uncertainty.By simplifying practical problems to models,this papr aims to provide the optimal decisions for enterprises to maximize their own profits when facing both input uncertainty and brand substitution,and it also provides the corresponding theoretical basis and support for supply chain risk management.This paper considers a two-echelon supply chain with two suppliers and one manufacturer.The suppliers face yield uncertainty and receive determinate orders from the manufacturer.Optimal input quantity decisions of the suppliers are obtained by considering different situations: the brands are substitutable or not substitutable.The result shows that substitution effect can improve the supply chain members’ expected profits.Two different scenarios are also compared:(1)only the manufacturer considers the substitution effect;(2)all members consider the substitution effect.We find that the manufacturer is always better off when all members consider the substitution effect.However,it does not hold for the suppliers.Replenishment tactics are introduced to improve the performance of the supply chain.All the findings are illustrated by numerical examples.