Abstract
In this paper, we propose a capacitated supply chain network equilibrium model in which three tiers of decision makers (manufacturers, retailers and consumers at demand markets) seek to determine their optimal plans over a multi-period planning horizon. Unlike other studies in the extent literature, we use a new concept of purchasing strategy to model the strategic behavior of retailers and consumers at demand markets in a capacitated supply chain network. A purchasing strategy denotes an ordered set of manufacturers (or retailers) from which each retailer (or each consumer at a demand market) prefers to purchase a product. We show that the equilibrium conditions governing the multi-period capacitated supply chain network equilibrium problem can be formulated as a variational inequality in terms of strategies and strategic flows. To find a solution to this variational inequality, we propose an iterative algorithm that generates strategies for retailers and consumers as required by solving a dynamic program. We prove that the solution set is nonempty and provide a numerical example to illustrate the validity of our model.
Original language | English |
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Pages (from-to) | 803-820 |
Number of pages | 18 |
Journal | Transportation Research Part C: Emerging Technologies |
Volume | 19 |
Issue number | 5 |
DOIs | |
Publication status | Published - Aug 2011 |
Keywords
- Capacity
- Multi-period supply chains
- Network equilibrium
- Purchasing strategy
- Transportation networks
ASJC Scopus subject areas
- Civil and Structural Engineering
- Automotive Engineering
- Transportation
- Computer Science Applications