Stackelberg game models between two competitive retailers in fuzzy decision environment

In this paper, we study the pricing problem in a fuzzy supply chain that consists of a manufacturer and two competitive retailers. There is a single product produced by a manufacturer and then sold by two competitive retailers to the consumers. The manufacturer acting as a leader determines the wholesale price, and the retailers acting as the followers set their sale prices independently. Both the manufacturing cost and the demand for product are characterized as fuzzy variables, we analyze how the manufacturer and the retailers make their pricing decisions with the duopolistic retailers’ different behaviors: competition strategy and collusion strategy, and develop the expected value models in this paper. Finally, numerical examples illustrate the effectiveness of the proposed two-echelon models using fuzzy set theory.