Complexity Dynamic Character Analysis of Retailers Based on the Share of Stochastic Demand and Service

Abstract EN

Apart from the price fluctuation, the retailers’ service level becomes another key factor that affects the market demand.

This paper depicts a modified price and demand game model based on the stochastic demand and the retailer’s service level which influences the market demand decided by customers’ preference, while the market demand is stochastic in this model.

We explore how the price adjustment speed affects the stability of the supply chain system with respect to service level and stochastic demand.

The dynamic behavior of the system is researched by simulation and the stability domain and the bifurcation phenomenon are shown clearly.

The largest Lyapunov exponent and the chaotic attractor are also given to confirm the chaotic characteristic of the system.

The simulation results indicate that relatively small price adjustment speed may maintain the system at stable state.

With the price adjustment speed gradually increasing, the price system gets unstable and finally becomes chaotic.

This chaotic phenomenon will perturb the product market and this phenomenon should be controlled to keep the system stay in the stable region.

So the chaos control is done and the chaos can be controlled completely.

The conclusion makes significant contribution to the system referring to the price fluctuation based on the service level and stochastic demand.