A game theoretic approach with cooperative advertisement and quality level in two level supply chain with considering complementary products and uncertainty in demand

Document Type : Research Paper


1 School of Industrial Engineering, College of Engineering, University of Tehran

2 School of Industrial Engineering, College of engineering, University of Tehran, Tehran, Iran



Vertical cooperative advertisement is one of the market strategies in which the manufacturer pay for a part of the supplier’s local advertisements. Considering quality level of products in the model and demand function is necessary and interesting. In this paper, a two level supply chain with one manufacturer and one supplier and one complementary manufacturer is developed which advertisement costs share among manufacturer and retailer. It means that, we have a cooperative advertisement in this model. The demand in this paper have uncertainty and retailer order products from manufacturer with uncertainty. This supply chain and distribution channel with uncertainty in retailers demand, products quality level and considering complementary price and qualities is one of the most practical model in this field. The main aim of these model is giving insights to managers and decision makers by investigate the effect of the participation rate and some of the important parameters on other important variables and profit functions and display the relationship between this rate and the variables trend. There are two non-cooperative games including manufacturer Stackelberg and supplier Stackelberg. The results are obtained from these games and the trends are demonstrated.