Operational Research

, Volume 16, Issue 1, pp 89–115 | Cite as

Pricing, inventory and production policies in a supply chain of pharmacological products with rework process: a game theoretic approach

  • Ata Allah TaleizadehEmail author
  • Mahsa Noori-daryan
Original Paper


In this paper, an economic production quantity model in a three levels supply chain including multiple non-competing suppliers, single manufacturer and multiple non-competing retailers for multiple products with rework process under integrated and non-integrated structures is developed. In this chain, suppliers ship raw material to the manufacturer and the manufacturer combines the fixed percentage of different kinds of raw material to produce the finished products and then delivers them to the retailers. The Stackelberg game is established among the members of the chain. Optimizing the total profit of the chain under both structures applying the optimal pricing, inventory and production policies is the purpose of the research. Eventually, a numerical example is presented for comparing the total profit of the integrated and non-integrated chains of proposed model and some sensitivity analyses are performed to study the effects of parameter changes on the decision variables and the chain profit.


Pricing Inventory control Production Health care Rework process Game theory Supply chain 



The authors thank the three anonymous reviewers for their helpful suggestions which have strongly enhanced this paper. The first author would like to thank the financial support of the University of Tehran for this research under Grant Number 30015-1-02.


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© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.School of Industrial Engineering, College of EngineeringUniversity of TehranTehranIran

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