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A Stackelberg game theoretic model for optimizing product family architecting with supply chain consideration

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  • Wang, Danping
  • Du, Gang
  • Jiao, Roger J.
  • Wu, Ray
  • Yu, Jianping
  • Yang, Dong

Abstract

Planning of an optimal product family architecture (PFA) plays a critical role in defining an organization׳s product platforms for product variant configuration while leveraging commonality and variety. The focus of PFA planning has been traditionally limited to the product design stage, yet with limited consideration of the downstream supply chain-related issues. Decisions of supply chain configuration have a profound impact on not only the end cost of product family fulfillment, but also how to design the architecture of module configuration within a product family. It is imperative for product family architecting to be optimized in conjunction with supply chain configuration decisions. This paper formulates joint optimization of PFA planning and supply chain configuration as a Stackelberg game. A nonlinear, mixed integer bilevel programming model is developed to deal with the leader–follower game decisions between product family architecting and supply chain configuration. The PFA decision making is represented as an upper-level optimization problem for optimal selection of the base modules and compound modules. A lower-level optimization problem copes with supply chain decisions in accordance with the upper-level decisions of product variant configuration. Consistent with the bilevel optimization model, a nested genetic algorithm is developed to derive near optimal solutions for PFA and the corresponding supply chain network. A case study of joint PFA and supply chain decisions for power transformers is reported to demonstrate the feasibility and potential of the proposed Stackelberg game theoretic joint optimization of PFA and supply chain decisions.

Suggested Citation

  • Wang, Danping & Du, Gang & Jiao, Roger J. & Wu, Ray & Yu, Jianping & Yang, Dong, 2016. "A Stackelberg game theoretic model for optimizing product family architecting with supply chain consideration," International Journal of Production Economics, Elsevier, vol. 172(C), pages 1-18.
    • Handle: RePEc:eee:proeco:v:172:y:2016:i:c:p:1-18
    DOI: 10.1016/j.ijpe.2015.11.001
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    References listed on IDEAS

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    4. Biswajit Sarkar & Sharmila Saren & Mitali Sarkar & Yong Won Seo, 2016. "A Stackelberg Game Approach in an Integrated Inventory Model with Carbon-Emission and Setup Cost Reduction," Sustainability, MDPI, vol. 8(12), pages 1-23, December.
    5. M. W. Geda & Pai Zheng & C. K. Kwong & Yuk Ming Tang, 2024. "A bilevel optimisation model for the joint configuration of new and remanufactured products considering specification upgrading of used products," Journal of Intelligent Manufacturing, Springer, vol. 35(5), pages 2175-2191, June.
    6. Eltoukhy, Abdelrahman E.E. & Wang, Z.X. & Chan, Felix T.S. & Fu, X., 2019. "Data analytics in managing aircraft routing and maintenance staffing with price competition by a Stackelberg-Nash game model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 143-168.
    7. Taha-Hossein Hejazi & Behrooz Khorshidvand, 2024. "Robust optimization of sustainable closed-loop supply chain network considering product family," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(4), pages 10591-10621, April.
    8. Shih-Pin Chen, 2017. "Effects of fuzzy data on decision making in a competitive supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1146-1160, October.
    9. Wang, Jian & He, Shulin, 2022. "Optimal decisions of modularity, prices and return policy in a dual-channel supply chain under mass customization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
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    12. Qiu, Xuan & Huang, George Q., 2016. "Transportation service sharing and replenishment/delivery scheduling in Supply Hub in Industrial Park (SHIP)," International Journal of Production Economics, Elsevier, vol. 175(C), pages 109-120.
    13. Xiong, Yixuan & Du, Gang & Jiao, Roger J., 2018. "Modular product platforming with supply chain postponement decisions by leader-follower interactive optimization," International Journal of Production Economics, Elsevier, vol. 205(C), pages 272-286.
    14. Gang Du & Yi Xia & Roger J. Jiao & Xiaojie Liu, 2019. "Leader-follower joint optimization problems in product family design," Journal of Intelligent Manufacturing, Springer, vol. 30(3), pages 1387-1405, March.
    15. Soroush Safarzadeh, 2023. "A game theoretic approach for pricing and advertising of an integrated product family in a duopoly," Journal of Combinatorial Optimization, Springer, vol. 45(5), pages 1-26, July.
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