Resilient network design of two supply chains under price competition: game theoretic and decomposition algorithm approach

This paper utilizes a Stackelberg game approach for designing resilient supply chains under price competition and facilities disruption. The impact of using resilience strategies, namely holding extra inventory at distribution centers and considering reliable distribution centers, was investigated on the supply chains competition. A two-phase bi-level mixed integer programming approach is utilized to model the assumed problem, and a decomposition-based approach is utilized to solve the resultant model. Then, the performance of the presented model and solution approach is examined through numerical experiments. Finally, some discussions are presented with a number of examples, and managerial insights are suggested for the conditions similar to the assumed problem. Our analysis focuses on exploring the advantages of considering resilience strategies in the competitive supply chain netwrok design problems.