In this paper a three echelon supply chain with non-cooperative behaviour is
considered which consists of multiple suppliers, one manufacturer and multiple
retailers who are involved in procurement, producing and selling only one type of
finished product. Each supplier provides one type of component or raw material to
the manufacturer and the manufacturer purchases one type of raw material from
only one supplier according to the Bill of Materials of the finished product. The
manufacturer produces finished products and distributes them to its retailers in
separate and independent markets. We assume that there is no competition and
transhipment between the retailers and the demand rate in each local retail market
is a decreasing and convex function changes with respect to its own retail price.
Since each individual entity retains some degree of autonomies and makes its own
decisions in order to respond to the changing environments, coordinating
inventory and marketing decisions increases their profits of both the supply chain
and the entities. Also,the decisions of each entity are dependent on the decisions
made in other levels. In this paper, we consider a scenario in which retailers manufacturer and manufacturer-suppliers are leader-follower schemes and there
are no direct connections between retailers and suppliers. This scenario can be
addressed as a Stackelberg game [4,17 and 19]. Thus, we have applied this
approach via a three-level, non-linear multi-objective Stackelberg game to answer