The Impact of Service and Channel Integration on the Stability and Complexity of the Supply Chain

Abstract

This paper constructs a supply chain consisting of a manufacturer and a retailer. Considering channel integration and service cooperation, two dynamic Stackelberg game models are established: one without unit profit allocation M and the other one with unit profit allocation Mε. In two dynamic models, we analyze the influence of relevant parameters on the stability and complexity of the dynamic system and system profit by nonlinear system theory and numerical simulation. We find that the higher adjustment parameters can cause the system to lose stability, showing double period bifurcation or wave-shape chaos. The stable region becomes larger with increase in service value and value of unit profit sharing. Besides, when the system is in chaotic state, we find that the profit of the system will fluctuate or even decline sharply; however, keeping the parameters in a certain range is helpful in maintaining the system stability and is conducive to decision-makers to obtain steady profits. In order to control the chaos phenomenon, the state feedback method is employed to control the chaotic system well. This study provides some valuable significance to supply chain managers in channel integration and service cooperation.

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