Cooperation Modeling for Unlimited Three Echelon Supply Chain: Game Theory Approach

Supply chain (SC) management aims to increase the overall profit through improvement of various activities and components. Many contradictions between parts and different levels of a SC have been identified in order to achieve overall objectives. Such shortfalls may result in decreased strength and competitiveness of the SC. The basics of game theory make it a suitable and reliable tool for solving contradiction situations by considering all levels and players goal. For Solving the problem mentioned above، game theory approach besides coordination mechanism are performed in this research. First of all an unlimited three echelon supply chain including S suppliers، M manufacturers and K retailers are considered. For this matter، a mathematical cooperative model based on specific assumptions is proposed. The model was performed in a numerical example and it is solved by genetic algorithm. The sensitivity analysis of proposed model was analyzed by design of experiment and finally the verification of the cooperative model is assessed by simulation and Arena software.