Applications of Game Theory in Supply Chain Management

Facing globalization, increasing customer demands and growing competitive pressure, efficient supply chain management is essential for a company's long-term success. The individual interests of the agents within the supply chain can thereby be linked to those of their partners and the achievement of objectives can therefore depend not only on their own actions but also on those of the other participants in the supply chain. For example, a retailer decides on its pricing strategy not only by taking into account customer demand, but also the wholesale price of the respective manufacturer. Concepts of game theory are therefore widely used in the analysis of quantitative supply chain models.  As a mathematical method, game theory enables the analysis of complex decision situations and also allows to depict power distributions within the supply chain. 

As part of the dissertation project, current topics in supply chain management will be examined from a game theoretic perspective. These include:

• the investigation of quality decisions within the supply chain in the presence of imperfect production processes and different customer segments on the market
• the analysis of the effects of returns in online retailing and possible strategies to reduce them
• the consideration of information asymmetries between the agents within closed-loop supply chains.