Optimal models in price competition supply chain under a fuzzy decision environment

Abstract

This paper considers supply chain models with a manufacturer acting as the leader and two competitive retailers acting as followers under a fuzzy decision environment. The parameters of demand function and manufacturing cost are treated as the triangular fuzzy variables. Two retailers are assumed to pursue two kinds of competitive behavior: Cournot and Stackelberg. For each case, optimum policy of the expected value and two chance-constrained programming models are derived. Finally, a numerical example is provided to illustrate the results of proposed models. It is shown that in fuzzy models, the different competitive behaviors of two retailers do not affect the optimal pricing strategies of the manufacturer, and the confidence level of the profits for supply chain members affects the optimal sale price, wholesale price and profits.