Game theory analysis of quality control in two-echelon supply chain

Game theories were used to study the problem of quality control in the two-echelon supply chain which has one manufacturer and one supplier in this paper. Firstly, a stackelberg game was introduced into the quality control of a two-echelon supply chain. In this general non-cooperative quality control game situation, the manufacturer acts as the leader, the optimal action policies were obtained for the manufacturer and the supplier. Then, a Nash bargaining model was used to analyze optimal action selection in the cooperative quality control game situation and to determine the profit segment between two supply chain members after collaboration. By comparison of two game equilibrium results above, it was found that the cooperative quality control game structure is superior to the general non-cooperative quality control game structure during the process of quality management in the two-echelon supply chain. Finally, a numerical example is given to illustrate the conclusion of this paper. © 2013 Shanghai Jiaotong University and Springer-Verlag Berlin Heidelberg.