This paper studying the impact of strategic customer behavior on decentralized supply chain gains and decisions, which includes a supplier, and a monopoly firm as a retailer who sells a single product over a finite two periods of selling season. We consider three types of customers: myopic, strategic and low-value customers. The problem is formulated as a bi-level game where at the second level (e.g. horizontal game), the retailer determines his/her equilibrium pricing strategy in a non-cooperative simultaneous general game with strategic customers who choose equilibrium purchasing strategy to maximize their expected surplus. At the first level (e.g. vertical game), the supplier competes with the retailer as leader and follower in the Stackelberg game. They set the wholesale price and initial stocking capacity to maximize their profits. Finally, a numerical study is presented to demonstrate the impacts of strategic behavior on supply chain gain and decisions; subsequently the effects of market parameters on decision variables and total profitability of supply chain's members is studied through a sensitivity analysis. key words: pricing and revenue management, strategic customer, supply chain management, game theory.

This paper studies inventory and pricing policies in a non-cooperative supply chain with one supplier and several retailers who are involved in producing, delivering and selling a single product. We consider inventory policies in an information-asymmetric vendor managed inventory. The study consists of different scenarios where a supplier produces the product at the wholesale price to multiple retailers. The retailers also distribute the product in dispersed and independent markets at retail selling prices. The demand rate for each market is a nondecreasing concave function of the marketing expenditures of both local retailers and the manufacturer, but a non-increasing and convex function of the retail selling prices. The primary purpose is to determine wholesale price, marketing expenditure for supplier and retailers, replenishment cycles for the product, and backorder quantity to maximize the total profit for both groups of supplier and retailers. All scenarios are modeled as a Stackelberg game where the manufacturer is the leader and the retailers are the followers. A numerical study are presented to demonstrate the influences of decision variables and/or parameters in various scenarios.