Amin Saghaeeian - Department of Industrial Engineering, K.N. Toosi University of Technology, Tehran, Iran
Reza Ramezanian - Department of Industrial Engineering, K.N. Toosi University of Technology, Tehran, Iran

This study considers pricing, production and transportation decisions in a stackelberg game between three-stage, multi-product, multi-source and single-period supply chains called leader and follower. These chains consist of; manufacturers, distribution centers (DCs) and retailers. Competition type is horizontal and SC vs. SC. The retailers in two chains try to maximize their profit through the pricing of products in different markets and regarding the transportation and production costs. A bilevel nonlinear programming model is formulated in order to represent the stackelberg game. Pricing decisions are based on discrimination pricing rules, where we can put different prices in different markets. After that the model is reduced to a single-level nonlinear programming model by replacing Karush-Kuhn-Tucker conditions for the lower level (follower) problem. Finally, a numerical example is solved in order to analyze the sensitivity of effective parameters.

Competitive supply chain, multi-product, pricing, stackelberg game, elastic demand, complementary product