Game analysis between manufacturer and supplier in the supply chain

Abstract

The management and operational way of our country's manufacturers have long been impacted seriously by the traditional opinion "large and complete", "small and complete". "All businesses never ask others for help" restricted manufacturers becoming a closed system, which is far from the open style global manufacture and the supply chain management. So the relation between manufactories and suppliers is a kind of simple cooperation that is based on the foundation of buying and selling in the market. With China's accession to the World Trade Organization and the introduction of western advanced management methodology such as logistics management method and supply chain management method, more and more manufacturer has realized the importance to build strategic partnership with suppliers and keep the core competence, which has been an irreplaceable role playing. This paper discusses the relationship between the manufacturers and suppliers and points out the disadvantages existing in the long period of cooperation. Then we build a mixed game model, and find the stable cooperation conditions. Finally, we point out the cooperation relation between them. © 2008 IEEE.