Vendor managed inventory with a capacitated manufacturer and multiple retailers: Retailer versus manufacturer leadership

Considering a supply chain composed of a single capacitated manufacturer and multiple retailers, we model a Stackelberg game vendor managed inventory framework under two scenarios: in the first, we follow the traditional approach wherein the manufacturer is the leader: in the second, we let one of the retailers act as the dominant player of the supply chain. Is retailer dominance a preferred outcome by all retailers? Can the supply chain efficiency be improved by having the dominance gravitated from the manufacturer to one of the retailers? Solving the corresponding MINLP problems, we provide some insights using numerical examples. (C) 2010 Elsevier B.V. All rights reserved.