A study on the effects of demand uncertainty based on stackelberg game in supply chain

Abstract

Demand uncertainty is the main problem of supply chain. It will do harm to enterprises of supply chain. Effect of uncertainty in a two-echelon supply chain system with one supplier and one retailer is discussed in this paper. The equilibrium of game indicates the bad effect, and leads to bullwhip effect, but when the condition changed, it will bring about some benefit. So it is necessary to analyze idiographic condition and appraise the effect of uncertainty when making decision in supply chain. © 2011 IEEE.