Measuring performance of supply chain by relational network DEA: A game theory approach

Abstract

An appropriate performance measurement system is an important requirement for the effective management of a supply chain. Because of the existence of the intermediate measures connecting the supply chain members, conventional data envelopment analysis (DEA) cannot be utilized directly to measure the performance of supply chain and its members. This paper evaluated the performance of supply chain under cooperative and non-cooperative games by utilizing relational network DEA. Relational network DEA model considers the interrelationship of the members within the supply chain, to measure the efficiency of the supply chain and those of the members at the same time. The non-cooperative game is based on the Stackelberg strategy solution concept. In non- cooperative game, it is considered that some parts in supply chain have more power in marketing competition (leaders) and the other parts of the supply chain repetition of supply chain are the followers. In the leader-follower structure (Stackelberg model), the leaders efficiency, first evaluated by using the relational network DEA in parallel situation, and then the followers efficiency is evaluated, using information related to the leader’s efficiency. In cooperative game it is assumed that all parts of supply chain cooperate to each other in order to achieve higher efficiency.