Joint Pricing and Inventory Management of Interbasin Water Transfer Supply Chain

Abstract

Four game-theoretical decision models without/with backlogging for the interbasin water transfer (IBWT) supply chain considering water delivery loss under joint pricing and inventory management (JPIM) are first developed, analyzed, and compared; then, the corresponding numerical and sensitivity analyses are conducted and compared; finally, the managerial insights and practical implementations are summarized in this paper. The research results indicate that (1) a revenue and cost sharing contract could effectively coordinate the IBWT supply chain and improve the operational performance of the IBWT supply chain under JPIM; (2) the partial backlogging strategy of water demand could effectively improve the operational performance of the IBWT supply chain under JPIM; (3) coordination strategy with partial backlogging is the best strategy for improving the operational performance of the IBWT supply chain under JPIM; (4) reducing water delivery loss rate and operational costs and increasing backlogging ratio are beneficial to improving the operational performance of the IBWT supply chain under JPIM.