Delivery lead time competition between e-tailers: A game-theoretic study

Abstract

In the study, we analyse the impact of delivery time on the pricing, sales volume and profitability of a dual-channel supply chain consisting of manufacturer, retailer and e-tailer. We used the Stackelberg game to model the game between upstream and downstream channel partners and the horizontal Nash game to model the interaction between the e-tailers. Later we solved some numerical examples to develop the corollaries. It was found that the optimal price, sales volume and optimal profit significantly decreased when the delivery time was high and using game theory, we quantify the decrease. It was also observed that by regulating the customer preference towards the channel, this decrease can be controlled. © 2021 IEEE.