Mixed Strategy Game Analysis on Suppliers and Manufacturers during Logistics Procurement

摘要

There is a price competition between product manufacturers and material suppliers (buyers and sellers) that has already provided a trading relationship during the procurement logistics. Game analysis of price negotiations is conducted by considering the market factors such as supply-demand relationship and product sales. Then, a complete information static game model is established and a mixed strategy Nash equilibrium is obtained. A conclusion can be drawn from the analysis that the probability distribution of selecting each strategy of manufacturers and suppliers is highly related with external market environment. This finding provides theoretical reference about how to choose the pricing strategy for both manufacturers and suppliers during the procurement activities.