Optimizing service level, price, and inventory decisions for a supply chain with retailers’ competition and cooperation under VMI strategy

In a vendor-managed inventory (VMI) system, manufacturing vendor manages their retailer inventories. Studies on VMI-type supply chains mostly have not considered competition between retailers. There are few works the price competition; however, to best of authors’ knowledge, none papers formulated service strategy. The level is one competitive factors among competing Sometimes retailers choose compete cooperatively instead independently with manufacturer. present work investigates service, price, and decisions under retailers’ cooperation. Considering manufacturer as leader followers, respectively, Stackelberg game model problem developed. study proposes solution algorithm search Stackelberg–Nash equilibrium in cooperation independence models. numerically demonstrated explore impacts decision parameters. To validate model, number parameters subjected sensitivity analyses. It was found that higher self-service (cross-service) parameter would lead (lower) profits total profit two Retailer enhances performance; system decline. Furthermore, when cooperate, they motivated offer lower levels.