A Game Theory Approach for Supply Chain Coordination Model with Incentive Mechanisms of Discount and Delay in Payments

The uncertain nature of supply chains is one the key challenges managers, and researchers encounter in decision-making. Accordingly, this paper proposes a three-echelon chain which demands are uncertain. proposed has three participants, including supplier, manufacturer, retailer, while decentralized, centralized, coordination models have been formulated to maximize participants’ profits. In decentralized model, both manufacturer retailer independently determine level investment order quantity regarding scenario-based demands. centralized model determines optimal amounts for whole network. However, these may be different from values all participants. As such, using game theory, bilevel adjustable contract based on wholesale price as an incentive players participate plan. Results show that outperforms others by reducing network’s costs increasing profits simultaneously.