A Survey on Game theory application in supply chain management By Amin Alirezaee Ph.D

1. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
Game theory Application in
Supply Chain Management
Amin Alirezaee Ph.D

2. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
2
Ph.D in Industrial Engineering
Amin Alirezaee
Interested in: Supply Chain, Game theory,
Strategy, Planning, Startup
Host at Papyrus Podcast
A Simple Summary of Business Books
Strategy, Startup, Leadership, Marketing

3. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Table of Contents
Introduction
01
Introduction and definitions
Game Theory Models
03
Non-Cooperative (Nash, Stackelberg)
, Cooperative, Bargaining
Supply Chain Processes
02
Inventory, Pricing, Advertising,
Procurement, Transshipment
Other Attributes
Application of the subject in Iran
04
You can describe the topic of
the section here

4. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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World War

5. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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What is…Supply Chain
Supply Chain Management
Supply Chain Coordination
Game Theory

6. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Supply Chain
Distributer
Retailer
Supplier
Manufacturer
Raw Material
Customer

7. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Ford
Automobile Assembly Line
Supply Chain

8. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Supply Chain
Distributers
Retailers
Suppliers
Manufacturers
Raw Materials
Customers

9. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Problem: Conflict

10. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Supply Chain Coordination
supply chain coordination aims at
improving supply chain performance
by aligning the plans and the
objectives of individual enterprises.
It usually focuses on inventory
management and ordering decisions
in distributed inter-company settings.
Solution?

11. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Solution: Game Theory

12. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Win-Win situation
Good 4 Both
Bad 4 Both

13. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Game Theory for Supply Chain Coordination
Distributers
Retailers
Suppliers
Manufacturers
Raw Materials
Customers

14. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Vertical Competition

15. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Vertical Competition

16. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Horizontal Competition

17. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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02
Supply Chain
Processes
Inventory, Pricing, Advertising,
Procurement, Transshipment
Other Attributes

18. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Deterministic inventory situations
Newsvendor Model
Inventory Management

19. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Classical Newsvendor Problem Q : Quantity of Order
x: Demand function
p: sales price
v: purchasing price
g: Surplusage revenue
B: lost Sales Cost

20. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Newsvendor Problem
& Game Theory
Sales price for
Manufacturer (DV)
Q : Quantity of Order
x: Demand function
p: sales price
v: purchasing price
g: Surplusage revenue
B: lost Sales Cost
Manufacturer
Retailer
Customers

21. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Christmas tree
Seasonal Products
Energy
Airplane ticket
Pricing an IPO
Newsvendor Model
Two-Period
Multi-Product
Multi-Retailers
Multi-Manufacturers
Quality Decisions
Extensions on Demand function

22. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Production & Pricing
Competition
Bertrand Model
Cournot competition

23. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Assumptions: Rationality

24. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Game Theory for Supply Chain Coordination
Distributers
Retailers
Suppliers
Manufacturers
Raw Materials
Customers

25. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Transshipment
Vehicles , Companies, Roots

26. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D

27. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D

28. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Cooperative Advertising
& Pricing
Participation of Manufacturer in
Local Adversing Costa

29. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Cooperative Advertising
& Pricing
Manufacturer
Retailer
Customers
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w.D
D
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t.a
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).
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a
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p
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s

30. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Cooperative Advertising
& Pricing (Extensions) Manufacturer
Retailer
Customers
D p.D
w.D
D
a
t.a
A
p
D 
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
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m
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
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
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k
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k
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k
w
m
D M
r 

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
 

Demand Function

31. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Manufacturer
Retailer 1
Customers
D1 p1.D1
w1.D1
D1
a1
t1.a1
Retailer 2
p2.D2 D2
a2
w2.D2 D2 t2.a2
Extensions
Manufacturer
1
Retailer
Customers
D1 p1.D1
w1.D1
D1
t1.a
p2.D2 D2
a
w2.D2 D2 t2.a
Manufacturer
2
Manufacturer
Retailer
Customers
D1 p1.D1
w1.D1
D1
t1.a
p2.D2 D2
a
Store’s
Manufacturer
Retailer 1
Customers
D1 p1.D1
w1.D1
D1
a1
t1.a1
Retailer 2
p2.D2 D2
a2
w2.D2 D2 t2.a2
Manufacturer
1
Manufacturer
2

32. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Extensions
Retailer 1
Customers
D1 p1.D1
w1.D1
D1
a1
t1.a1
Retailer 2
p2.D2 D2
a2
Manufacturer
1
Manufacturer
2
Manufacturer
Retailer 1
Customers
D1 p1.D1
w1.D1
D1
a1
t1.a1
Retailer 2
D2 p2.D2
w2.D2
D2
a2
t2.a2
Retailer n
Dn pn.Dn
wn.Dn
Dn
...
tn.an
an
Manufacturer
Distributer
Customers
D p.D
w.D
D
a
tM.a
Retailer
tD.a D v.D

33. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Numerical Analysis
& Managerial Insights
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.58
0.62
0.66
0.7
0.74
0.78
0.82
0.86
0.9
0.94
0.98
1.02
1.06
1.1
1.14
1.18
1.22
1.26
1.3
1.34
1.38
1.42
1.46
1.5
1.54
1.58
1.62
1.66
t1
t2
t3
t4
t5

34. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Capacity Decisions
Service Quality
Product Quality
New Product Introduction
Inventory Management
Buyback policy
Franchising
Fairness Concerns
Reference price
Other Attributes

35. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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03
Game Theory
Models
Non-Cooperative (Nash, Stackelberg)
, Cooperative, Bargaining

36. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Cooperative Games
Wrong but repetitive
Consider the entire supply chain
as a unique decision maker
Core, Shapley Value,
Nucleous
Centralized Supply Chain Coalitional Games
To distribute the extra profit
from the Cooperation
Bargaining Games

37. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Solving Situation

38. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Static Game (Nash Equilibrium)
  0
,
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
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,
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w
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
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m
i
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,

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1
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 
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
solving
simultaneously

39. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
39
Dynamic Game (Stackelberg Equilibrium)
 
  
 
 
 
1
0
0
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...
1
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4
...
1
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1
4
1
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,
,
2
2
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
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Max


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   
    n
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
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 


Backward
Induction

40. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Difficulty: Mathematics Analysis & Proof

41. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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04
Application of
the subject in Iran
Economic, Governance, Culture

42. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Governance

43. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Culture

44. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Economic
Inflation, Sanctions

45. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Growing and Important
Research Area
Need strong Math
Practical and real
Need to customize in iran
Summary
I
I
I
I

46. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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Resource
Game theoretic applications in
supply chain management: A
review
A review of non-cooperative
newsvendor games with horizontal
inventory interactions
Leng & Parlar Lena Silbermayr
Cooperative advertising models in
supply chain management: A review
The Newsvendor Problem: Review
and Directions for Future Research
G.Aust U.Buscher Y.Qin & R.Wang
A Review on Supply Chain Coordination:
Coordination Mechanisms, Managing
Uncertainty and Research Directions
Arshinder et al.
Supply Chain Coordination with
Contracts
Cachon

47. Game theory Application in Supply Chain Management , Amin Alirezaee Ph.D
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