Title: Designing an integrated multi-echelon supply chain network with competition

Authors: Isa Feyzian-Tary; Jafar Razmi; Mohamad Sadegh Sangari

Addresses: School of Industrial Engineering, College of Engineering, University of Tehran, P.O. Box 11155-45632, Tehran, Iran ' School of Industrial Engineering, College of Engineering, University of Tehran, P.O. Box 11155-45632, Tehran, Iran ' Faculty of Fouman, College of Engineering, University of Tehran, P.O. Box 43515-1155, Fouman 43516-66456, Iran

Abstract: This paper develops a model for competitive supply chain network design which investigates competition between new and existing chains where demand is deterministic and price-dependent. The network consists of raw material suppliers, manufacturers, retailers, and demand market. The supply chains compete in a non-cooperative manner and manufacturers produce homogeneous products. The objective is to maximise the future profits of both chains. First, the problem is formulated by mathematical programming and Lagrangian theory is used for adding the constraints to the objective function. Then, the equilibrium conditions are derived and the problem is formulated as a finite-dimensional variational inequality model. Qualitative properties of the equilibrium pattern are derived to establish existence and uniqueness results under reasonable conditions. The modified projection method is used to solve the variational inequality problem. Finally, a numerical example is presented to illustrate the efficiency of the proposed model and analyse the results under different conditions.

Keywords: supply chain management; SCM; supply networks; network design; competition; Nash equilibrium; variational inequality; modified projection method; supply chain design; multi-echelon supply chains.

DOI: 10.1504/IJLSM.2017.082616

International Journal of Logistics Systems and Management, 2017 Vol.26 No.4, pp.515 - 544

Received: 04 Sep 2015
Accepted: 14 Feb 2016
Published online: 03 Mar 2017 *

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