Reliability for three-level supply chain

This paper considers a supply chain system consisting of one supplier, one retailer and one consumer. Both the supplier and retailer are assumed to have more power than the consumer who is at the terminal end of the chain. However, the supplier and retailer take turns being leader (monopolistic). Using a Stackelberg game approach, we investigate the reliability of the chain from the perspective of the consumer, who, in order to make sure that the product she received attains a certain quality, sets a quality level below which she will not purchase the product. Numerical examples will highlight the advantages and disadvantages of the different monopolistic systems, as well as the reliability of the chain under them.