Bi-level pricing and inventory strategies for perishable products in a competitive supply chain

This paper aims to develop a new bi-level game model for joint pricing and inventory decisions in competitive supply chain consisting of dominant manufacturer, who produces single perishable product from deteriorating raw materials, two follower retailers face nonlinear price-dependent demand operate under Cournot assumptions. Three levels warehousing including material warehouse, final retail warehouses with exponential deterioration rates are considered explore the impact rate price elasticity on equilibrium decisions. A Stackelberg–Nash–Cournot is developed seek prices, quantities, replenishment cycles solved through an exact methodology. numerical example presented validate proposed comprehensive sensitivity analyses carried out measure model’s key parameters producer’s retailers’ warehouses, competitor elasticity, market scale equilibrium.