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Economic analysis of implementing VMI model using game theory

Author

Listed:
  • Vojtech Stehel

    (Institute of Technology & Business in Ceske Budejovice, Czech Republic)

  • Marek Vochozka

    (Institute of Technology & Business in Ceske Budejovice, Czech Republic)

  • Tomas Kliestik

    (University of Zilina, Slovak Republic)

  • Vladimir Bakes

    (University of Zilina, Slovak Republic)

Abstract

Research background: The article deals with implementing VMI between the supplier and customer. To assess whether the system will be implemented, the evolution game theory is used. The contribution is based on the limitations of the study of the evolutionary game theory approach to modelling VMI policies (Torres et al., 2014) and its later extension, The evolutionary game theory approach to modelling VMI policies (Torres & García-Díaz, 2018). It aims is to complement the studies and provide a comprehensive picture of the issue. Purpose of the article: The main objective of the contribution is to respond to the question whether the VMI system will be introduced between the supplier and customer. Methods: In the first phase, the matrix is analysed from the point of view of the game meaning and its limit parameters. The limit parameters are set taking into account the economic reality. The only examined states of the matrix are those where the result is not obvious. For the purposes of the contribution, we work with a 5-year period. A new software capable of calculating evolutionary focus and their stability is created. Sensitivity analysis is carried out for the individual parameters that affect the system behaviour. Findings & Value added: Value added is a complex description of the system and complementation of previous studies in this field. VMI is confirmed. The results obtained can be used for practical management, so that the managers are able to identify what the actual costs are and what the probability of introducing the sys-tem is. At the same time, they can identify the parameters that can be influenced by them and observe their impact on the shift of the system introduction probability.

Suggested Citation

  • Vojtech Stehel & Marek Vochozka & Tomas Kliestik & Vladimir Bakes, 2019. "Economic analysis of implementing VMI model using game theory," Oeconomia Copernicana, Institute of Economic Research, vol. 10(2), pages 253-272, June.
    • Handle: RePEc:pes:ieroec:v:10:y:2019:i:2:p:253-272
    DOI: 10.24136/oc.2019.013
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    Citations

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    Cited by:

    1. He Zhao & Qin Heng Zhao & Beata Ślusarczyk, 2019. "Sustainability and Digitalization of Corporate Management Based on Augmented/Virtual Reality Tools Usage: China and Other World IT Companies’ Experience," Sustainability, MDPI, vol. 11(17), pages 1-17, August.
    2. Hemant Chauhan & Ashutosh Pandey & Saurabh Mishra & Shashi Kant Rai, 2021. "Modeling the predictors of consumers’ online purchase intention of green products: the role of personal innovativeness and environmental drive," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16769-16785, November.
    3. David Vrtana & Anna Krizanova & Eva Skorvagova & Katarina Valaskova, 2020. "Exploring the Affective Level in Adolescents in Relation to Advertising with a Selected Emotional Appeal," Sustainability, MDPI, vol. 12(19), pages 1-16, October.

    More about this item

    Keywords

    VMI; game theory; sensitivity analysis;
    All these keywords.

    JEL classification:

    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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