A solution algorithm for multi-period bi-level channel optimization with dynamic price-dependent stochastic demand
| Autor: | Leif Kristoffer Sandal, Jan Ubøe, Reza Azad Gholami |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
021103 operations research
Information Systems and Management Optimization problem Computer science Iterative method Strategy and Management 05 social sciences 0211 other engineering and technologies 02 engineering and technology Management Science and Operations Research Newsvendor model 0502 economics and business Dynamic demand Stackelberg competition State space 050207 economics Algorithm Game theory Communication channel |
| Zdroj: | Omega. 102:102297 |
| ISSN: | 0305-0483 |
| DOI: | 10.1016/j.omega.2020.102297 |
| Popis: | We extend the single-period decentralized channel optimization problem with stochastic demand into a multi-period, non-autonomous one and propose an efficient general solution algorithm for it. A supply channel composed of two price-setting agents in a bi-level (Stackelberg) framework has to address an uncertain dynamic demand for a perishable good at different times. The stochastic demand model is general (additive-multiplicative). A class of price-dependent memory functions is embedded in the proposed representation of uncertain demand such that they carry the effect of demand level at present over to the demand in the future. Due to this dependence of the current demand to the pricing history, the state space of the ensuing games becomes highly nested. The proposed iterative algorithm decouples the nested equilibria into separate yet interdependent sub-problems and provides explicit solutions. All the model variables and parameters are considered explicitly time-dependent enabling the model to cover cases with finite and infinite time-horizons. Flexibility and generality of our solution scheme make it applicable to a wide variety of economic contexts. In a series of examples we demonstrate how, fed by different market specifications and memory functions, the solution algorithm can find equilibrium results for a diverse set of scenarios at different times. |
| Databáze: | OpenAIRE |
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