Supply chain coordination game model based on inventory information sharing

Abstract

We discussed a two stage revenue coordination problem based on inventory information sharing in this paper. The buyer is in the leader position, while the supplier acts as the follower. We adopted a leader-follower game method in our research. The model analysis shows that information sharing can lead to the loss of the supplier and the inventory cost saving of the buyer. Results from the model show that there are two ratios have a great influence on the cost savings of the buyer, the supplier and the whole system. The two ratios are the ratio of the order cost of the supplier to the buyer and the ratio of the carrying charges of the supplier to the buyer. Finally, a compensation policy is given to compensate the loss of the supplier.

Keywords:

• Information sharing
• Game theory
• Optimization
• Supply chain coordination