Game theory to control logistic costs in a two-echelon supply chain

As a mathematical tool of the decision maker, game theory is an essential methodology to analyze and solve situations where the decision of each rational agent, called player, affects the other agent's payoff. Indeed, in this work game theory is used to analyze an inventory and transportation optimization problem within a supply chain composed of two agents: a retailer who faces a random demand of a final product and his supplier of raw materials that is also responsible of the transportation function. Since the retailer is closer to the market and has a better view of demand forecasts careful attention given to Information sharing and its impacts. © 2014 IEEE.