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Price competition of manufacturers in supply chain under a fuzzy decision environment

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Abstract

This paper considers supply chain models with two competitive manufacturers and a common retailer that sells products of both manufacturers under a fuzzy decision environment. The parameters of demand function and manufacturing cost are treated as fuzzy variables. Two manufacturers and one retailer are assumed to pursue three different power balance scenarios: Manufacturer-Stackelberg, Retailer-Stackelberg and Vertical-Nash games. For each case, the optimal solutions of the expected value and two chance-constrained programming models are derived. Finally, numerical examples are provided to illustrate the results of proposed models. It is shown that in fuzzy models, the different scenarios affect the optimal pricing strategies, and the confidence level of the profits for supply chain members affects the optimal solutions.

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Acknowledgments

The author wishes to express his sincerest thanks to the editors and two anonymous referees for their constructive comments and suggestions on this paper. This work was supported by National Natural Science Foundation of China (70972005, 71071018), and the Doctoral Foundation of Heze University (XY12BS03).

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Correspondence to Shengju Sang.

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Sang, S. Price competition of manufacturers in supply chain under a fuzzy decision environment. Fuzzy Optim Decis Making 14, 335–363 (2015). https://doi.org/10.1007/s10700-014-9202-4

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