Supply chain network dual channel equilibrium with production capacity constraints and price rigidities

To obtain Nash equilibrium pattern which will lay the foundation for decision-making theories on production and operation,the various decision-makers′ optimal behavior was modeled.A supply chain network dual channel equilibrium problem which consisted of multiple mutual competition manufacturers,distributors and multiple mutual competition retailers with random market demand was studied.Based on variational inequality theory,a supply chain network dual channel equilibrium model with manufacturers' production capacity constraints and demand market's restricted price ceiling was established.Through logarithmic-quadratic proximal prediction-correction method,an algorithm for solving the equilibrium pattern was designed.The impact of production capacity constraints and price ceiling on the network equilibrium pattern was analyzed by combining with a numerical example.The results demonstrated that when the government restricted the price ceiling on competitive markets,the goods of demand market would cause a shortage,which led the manufacturers,the distributors and the retailers' total profit decrease.However,when existed capacity limitation,the goods equilibrium price without price limitation would be higher,and goods shortage of demand market would be more.