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Supply chain network competition in price and quality with multiple manufacturers and freight service providers

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  • Nagurney, Anna
  • Saberi, Sara
  • Shukla, Shivani
  • Floden, Jonas

Abstract

In this paper, we develop both static and dynamic supply chain network models with multiple manufacturers and freight service providers competing on price and quality. The manufacturers compete with one another in terms of price and quality of the product manufactured, whereas the freight service providers compete on price and quality of the transportation service they provide for multiple modes. Both manufacturers and freight service providers maximize their utilities (profits) while considering the consequences of the competitors’ prices and quality levels. Bounds on prices and quality levels are included that have relevant policy-related implications. The governing equilibrium conditions of the static model are formulated as a variational inequality problem. The underlying dynamics are then described, with the stationary point corresponding to the variational inequality solution. An algorithm which provides a discrete-time adjustment process and tracks the evolution of the quality levels and prices over time is proposed, and convergence results given. Numerical examples illustrate how such a supply chain network framework, which is relevant to products ranging from high value to low value ones, can be applied in practice.

Suggested Citation

  • Nagurney, Anna & Saberi, Sara & Shukla, Shivani & Floden, Jonas, 2015. "Supply chain network competition in price and quality with multiple manufacturers and freight service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 248-267.
    • Handle: RePEc:eee:transe:v:77:y:2015:i:c:p:248-267
    DOI: 10.1016/j.tre.2015.03.001
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    Cited by:

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    6. Jahani, Hamed & Abbasi, Babak & Alavifard, Farzad & Talluri, Srinivas, 2018. "Supply chain network redesign with demand and price uncertainty," International Journal of Production Economics, Elsevier, vol. 205(C), pages 287-312.
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    13. Omid Abdolazimi & Farzad Bahrami & Davood Shishebori & Majid Alimohammadi Ardakani, 2022. "A multi-objective closed-loop supply chain network design problem under parameter uncertainty: comparison of exact methods," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(9), pages 10768-10802, September.
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    15. Niu, Yi-Feng & Zhao, Xia & Xu, Xiu-Zhen & Zhang, Shi-Yun, 2023. "Reliability assessment of a stochastic-flow distribution network with carbon emission constraint," Reliability Engineering and System Safety, Elsevier, vol. 230(C).
    16. Mohammad Tamannaei & Hamid Zarei & Sajede Aminzadegan, 2021. "A Game-Theoretic Approach to the Freight Transportation Pricing Problem in the Presence of Intermodal Service Providers in a Competitive Market," Networks and Spatial Economics, Springer, vol. 21(1), pages 123-173, March.
    17. Zhang, Guangming & Dai, Gengxin & Sun, Hao & Zhang, Guitao & Yang, Zhilin, 2020. "Equilibrium in supply chain network with competition and service level between channels considering consumers' channel preferences," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    18. Shamekhi Amiri, A. & Torabi, S. Ali & Ghodsi, R., 2018. "An iterative approach for a bi-level competitive supply chain network design problem under foresight competition and variable coverage," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 99-114.
    19. Zhou, Yan & Chan, Chi Kin & Wong, Kar Hung, 2018. "A multi-period supply chain network equilibrium model considering retailers’ uncertain demands and dynamic loss-averse behaviors," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 51-76.
    20. Saberi, Sara & Cruz, Jose M. & Sarkis, Joseph & Nagurney, Anna, 2018. "A competitive multiperiod supply chain network model with freight carriers and green technology investment option," European Journal of Operational Research, Elsevier, vol. 266(3), pages 934-949.
    21. Yucai Wu & Jiguang Wang & Lu Chen, 2021. "Optimization and Decision of Supply Chain Considering Negative Spillover Effect and Service Competition," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    22. Nagurney, Anna & Shukla, Shivani & Nagurney, Ladimer S. & Saberi, Sara, 2018. "A game theory model for freight service provision security investments for high-value cargo," Economics of Transportation, Elsevier, vol. 16(C), pages 21-28.

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