Dynamic Game Behavior of Retailers Considering the Quality of Substitute Products Based on Delay Decision

Abstract

Motivated by the Silk Road Economic Belt and the 21st-Century Maritime Silk Road project, i.e. the Belt and Road (B&R), more goods will flow around the world. With this trading platform, people can buy products at relatively cheap prices, and it is easier for people to buy various goods. The quality and quantity of products thus attract more and more attention in the supply chains. This paper discusses the quantity decision by considering the product quality in parallel supply chains where two manufacturers produce substitute products and then sell them to their downstream retailers separately. In terms of the changing quantity, as well as the different quality, this paper establishes a dynamic game model to explore the dynamic behavior when the optimal profits of two retailers have been calculated. The dynamic behaviors of the system, such as stable region, bifurcation and chaos, strange attractors and the largest Lyapunov exponents (LLE) are analyzed. The effect of the quantity adjustment parameter on the stability of the supply chain system is investigated through numerical simulations. Furthermore, a dynamic game model is established based on the quality delay decision, to investigate the influence of the quality delay parameter on the dynamic game model and the profits. Finally, the optimal decisions are obtained and analyzed.