Analysis of Reverse Bullwhip Effect in Pricing for a Multi-stage Supply Chain with Competing Suppliers

摘要

Reverse bullwhip effect in pricing (RBP) refers to the amplified variability of retail prices compared to wholesale prices. RBP effect propagates from upstream towards downstream in a supply chain. The conditions for RBP depend upon the price sensitive demand functions that eventually govern the optimized retail prices. In this study, a game-theoretic framework is used to model a supply chain that consist of multiple suppliers, a wholesaler and a retailer. Multiple suppliers compete with each other following a simultaneous auction game. There are also sequential games among each supplier and the wholesaler and the retailer. Optimization along with simulation analysis has been applied to illustrate the presence of RBP effect for linear demand functions.