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Journal of Applied Mathematics
Volume 2014, Article ID 848593, 9 pages
http://dx.doi.org/10.1155/2014/848593
Research Article

Quality Improvement Policies in a Supply Chain with Stackelberg Games

1Academy of Mathematics and Systems Science, Chinese Academy of Sciences, Beijing 100190, China
2Department of Intelligence and Informatics, Konan University, 8-9-1 Okamoto, Kobe 658-8501, Japan

Received 5 December 2013; Accepted 8 January 2014; Published 18 February 2014

Academic Editor: Pu-yan Nie

Copyright © 2014 Gang Xie et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

We first analyze quality and price decisions in a supply chain with two Stackelberg games: Manufacturer’s Stackelberg (MS) and Supplier’s Stackelberg (SS). Then, we investigate how equilibrium solutions are influenced by proposed quality improvement policies: coordination and manufacturer’s involvement. Also, we derive the conditions under which the policies can be implemented in both MS and SS strategies. Numerical experiments illustrate the problems and several related issues are discussed. The results suggest that proposed quality improvement policies can realize Pareto improvement for the supply chain performance.