Price and Delivery Time Analyzing in Competition between an Electronic and a Traditional Supply Chain

Abstract EN

In this paper, the competition between two supply chains and their corresponding elements is modeled following the evolutionary games approach.

Each of the supply chains consists of a supplier and a manufacturer.

Customers are of one type and are sensitive to price and delivery time and receive identical services from the two supply chains.

One of the chains acts traditionally (TSC) in a monopoly market until the other chain enters the market acting electronically (ESC) and changes the market to a duopoly.

This competition continues as evolutionary game until equilibrium is reached in the market.

Mathematical models for analyzing internal and external competition issues are developed under four different scenarios: (i) both chains choose intercorporate strategy for their elements; (ii) the first chain chooses intercorporate strategy while the second one chooses intercompetition strategy for their elements; (iii) the first chain chooses intercompetition strategy and the second one chooses intercorporate strategy for their elements; (iv) both chains choose intercompetition strategy for their elements.

The best policies for TSC and ESC are found assuming identical conditions and furthermore in steady state when equilibrium is reached in the market, the best price and delivery time policy of chains is illustrated by numerical example.