Pricing in a Two-Echelon Supply Chain with Manufacturer's Competing to Seizing the Market in the Make-to-Order Environment by Using Game Theory

This paper develops a model based on game theory to analyze a two-echelon supply chain consists of two manufacturers and two retailers, that are operating in a make-to-order environment. The considerable point in the defined supply chain is that the manufacturers by taking into account the discount to the retailer that exclusively sells their products want to seize the market. In this model, manufacturers’ brand value and customers loyalty to a brand has high importance. It should be noted that in the defined Stackelberg model retail prices would be determined after specifying the lead times. We show that the reduction in the proportion of goods received by a retailer from a manufacturer will increase its retail price, also the exclusive supplying of a good rising its wholesale price.