Game-theoretic analysis of coordinating pricing and marketing decisions in a multi-product multi-echelon supply chain

Supply chain coordination aims at improving supply chain performance by aligning the decisions and the objectives of individual rms. Supply chain participants can cooperate for different decisions such as pricing, inventory management, and marketing to gain more prot. The current research considers coordination of these decisions in a multi product multi-echelon supply chain composed of multiple suppliers, single manufacturer, and multiple retailers. It is assumed that the demand of each product is non-linearly in uencedbyret ailingpricea ndmarketin gexpenditure. Sincea llthesupplychainmembers possess equal power in the market and make their decisions simultaneously, the threeechelon supply chain problem is a non-cooperative Nash game. In order to nd the Nash equilibrium, we formulate a Non-linear Complementarity Problem (NCP) based on the optimality conditions, and also an iterative algorithm is proposed to solve largesize instances. Finally, a numerical example is presented and a comprehensive sensitivity analysis is conducted to discuss important managerial insights