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A Supply Chain Network Game Theoretic Framework for Time-Based Competition with Transportation Costs and Product Differentiation

In: Optimization in Science and Engineering

Author

Listed:
  • Anna Nagurney

    (University of Massachusetts, Department of Operations and Information Management, Isenberg School of Management
    University of Gothenburg, School of Business, Economics and Law)

  • Min Yu

    (University of Portland, Pamplin School of Business Administration)

Abstract

In this paper, we developed a supply chain network game theory model with differentiated products and transportation costs in the case of time-based oligopolistic competition. The firms are profit-maximizers and have, as their strategic variables, the product shipments and the guaranteed delivery times to the consumers at the demand markets with the guaranteed delivery times never exceeding the sum of the production time and the transportation time. The demand price functions are functions of the demands for the products at the different demand markets as well as their guaranteed delivery times. The governing Nash equilibrium conditions are formulated as alternative variational inequalities. An algorithm is proposed, which yields closed form expressions, at each iteration, for the product shipments, the guaranteed delivery times, as well as the associated Lagrange multipliers. Supply chain network numerical examples are given to illustrate the modeling and the computational approach.

Suggested Citation

  • Anna Nagurney & Min Yu, 2014. "A Supply Chain Network Game Theoretic Framework for Time-Based Competition with Transportation Costs and Product Differentiation," Springer Books, in: Themistocles M. Rassias & Christodoulos A. Floudas & Sergiy Butenko (ed.), Optimization in Science and Engineering, edition 127, pages 373-391, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4939-0808-0_19
    DOI: 10.1007/978-1-4939-0808-0_19
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