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Entropy 2016, 18(11), 416; doi:10.3390/e18110416

Analysis of the Complexity Entropy and Chaos Control of the Bullwhip Effect Considering Price of Evolutionary Game between Two Retailers

1
College of Management and Economics, Tianjin University, Tianjin 300072, China
2
School of Management, Wuhan Textile University, Wuhan 430073, China
*
Author to whom correspondence should be addressed.
Academic Editor: J. A. Tenreiro Machado
Received: 26 July 2016 / Revised: 10 November 2016 / Accepted: 11 November 2016 / Published: 19 November 2016
(This article belongs to the Section Complexity)
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Abstract

In this research, a model is established to represent a supply chain, which consists of one manufacturer and two retailers. The price-sensitive demand model is considered and the price game system is built according to the rule of bounded rationality as well as the entropy theory. With the increase of the price adjustment speed, the game system may go into chaos from the stable and periodic state. The bullwhip effect and inventory variance ratio of different stages that the system falls in are compared in real time. We also employ the delayed feedback control method to control the system and succeed in mitigating the bullwhip effect of the system. On the whole, the bullwhip effect and inventory variance ratio in the stable state are smaller than those in period-doubling and chaos. In the stable state, there is an optimal price adjustment speed to obtain both the lowest bullwhip effect and inventory variance ratio. View Full-Text
Keywords: bullwhip effect; price game; inventory variance ratio; measure entropy; two retailers; bifurcation; chaos control bullwhip effect; price game; inventory variance ratio; measure entropy; two retailers; bifurcation; chaos control
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Ma, J.; Ma, X.; Lou, W. Analysis of the Complexity Entropy and Chaos Control of the Bullwhip Effect Considering Price of Evolutionary Game between Two Retailers. Entropy 2016, 18, 416.

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