Stackelberg Coordination of Supply Chain Optimization Based on Bilevel Programming

Enterprises always maximize their self-interest. However, competition of the market has turned into competition among the supply chain. So how to coordinate the mutual interests of all members of the supply chain is a problem that needs to be solved urgently. In generally, there is an enterprise played dominant core in the supply chain, and other members are of the subordinate status. This paper has studied how the dominant suppliers make price strategies and how the retailers choose appropriate strategies and return their order quantities by using bilevel programming. Finally, a example shows how manufacturers and retailers achieve balance and get their maximum profit.