and no direct connection between the retailers and suppliers, the net profit of the
chain entities was maximized. This notion was initially modeled as a three-level,
non-linear, multi objective Stackelberg game. Since this model is an NP-hard
problem, Stackelberg solution was attained by using a hybrid algorithm consisting
of two phases and the inventory, manufacturing and pricing policy of the
product were determined simultaneously. Moreover, a case study was introduced
to better understand the phenomenon and evaluate its practicality. Two major
model parameters ( ri AP and ri S ) in the decisions made by the chain entities for
taking up shortage and surplus policies was studied and it was found that by using
Stackelberg solution, the retailers can improve their net profit benefiting from
their leadership, while this case is not necessarily true for the other entities.
There can be much more possible directions in extending the present research.
Cooperative and semi-cooperative modes can be considered taking into account
mechanism for profit and cost sharing. Moreover, the model development can be
studied when the information is incomplete in terms of bargaining.