Dynamic Competitive Supply Chain Network Design with Price Dependent Demand and Huff Utility Function

Document Type : Research Paper

Authors

Department of Industrial Engineering, Iran University of Science & Technology, Terhan, Iran

Abstract

This paper develops a two-stage model to consider a franchise/franchisee environment in which supply chains are simultaneously entering the untapped market to produce either identical or highly substitutable products and give franchise to franchisees. Customer demand is elastic, price dependent and customer utility function is based on Huff gravity rule model. The supply chains, in the first stage, shape their networks and set the market prices based on dynamic games. The franchisees, in the second stage, specify their attractiveness levels and set the locations of their retailers in simultaneous games. Possibility theory was also applied to cope with uncertainty. Finally, we applied our model to a real world problem, discussed the results, conducted some sensitivity analyses, and gained some managerial insights.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 11, Issue 2
April 2018
Pages 271-305

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