Coordinating Multi-Level Supply Chain Network Considering Varied Influence Levels

This is the authors' abstract. We don't add key points for this paper.

The purpose of this paper is to analyze multi-level supply chain network where varied influence levels among firms. The influence level of each participant is proportional to the degree of the node, which represents the number of participating relationships. We consider Stackelberg game between firms where higher influential firms are leaders and weaker participants are followers. Under this supply chain network, we demonstrate the supply chain performance becomes significantly lower than global optimum. To improve the performance, we propose an incentive scheme provided from leaders to followers. We show incorporating proposed incentive mechanism not only improves the global supply chain performance, but also increases the actual profits of participating companies, enabling supply chain coordination.