Analysis Of Cold Chain Products’ Inventory Decision And Optimization Based On Game Theory

The logistics industry has developed rapidly in recent years and the market demand for cold chain products is increasing year by year, the cold chain industry is in a stage of rapid development in China. The study of inventory is an important part of logistics system research and the inventory decision and optimization research is of important significance for optimizing the supply chain and the production and operation of enterprises. So the inventory decision and optimization of cold chain products is particularly important.This paper starts from the two-echelon supply chain angle, using the game theory to construct the inventory decision models of decentralized decision-making and joint decision-making, and then simulate the models by a numerical example and analyze sensitivity of these two models. By analyzing and comparing these two inventory decision models, we find that under joint decision-making, the sales price of cold chain products is lower, the order quantity of the retailer is larger and the inventory level of the producer and the retailer is higher at each time point. The profits of the producer and the supply chain have indeed improved, but the retail’s profits declines. So the retailer wouldn’t choose cooperation and the joint decision-making strategy is infeasible.As the game leader, the producer needs to develop an optimization strategy to achieve Pareto efficiency of the supply chain. So we establish a mathematical model of price discount strategy from the angle of producer and solve it theoretically and simulate the model by a numerical example. By comparing this model with decentralized decision-making model and joint decision-making model, we find that under the price discount strategy, the sales price of cold chain products is consistent with the sales price of joint decision-making and the profits of both producer and the retailer is higher than the profits under decentralized decision-making. The commitment of profits growth rate of the retailer by the producer plays a role in distributing the profits between the producer and the retailer. The total profits of supply chain under the price discount strategy has reached the level of decentralized decision-making strategy, so this price discount strategy achieves the perfect coordination of the supply chain and it’s feasible and effective. Finally the paper gives some general conclusions and future research directions.