A Fuzzy Bi-level Pricing Model and a PSO Based Algorithm in Supply Chains

Ya Gao, Guangquan Zhang, Jie Lu, Hui-Ming Wee

Abstract: Due to rapid technological innovation and severe competition, the upstream component price and the downstream product cost in hi-tech industries usually decline significantly with time. In building a pricing supply chain model, some coefficients are generally obtained from experiments and cannot be defined as crisp numbers. Thus, an effective fuzzy pricing supply chain model becomes crucial. This paper establishes a fuzzy bi-level pricing model for buyers and vendors in supply chains. Then, a particle swarm optimization (PSO) based algorithm is developed to solve problems defined by this model. Experiments show that this PSO-based algorithm can solve fuzzy bi-level pricing problems effectively.