Abstract: Under the scenario of supply disruption and demand disturbance, considering a two-tier supply chain with two suppliers and one retailer, three game models, in cooperation, static noncooperation and nested static noncooperation, are proposed. The strategies of the retailer purchasing and the supplier pricing are studied under the centralized/decentralized supplier's competition & cooperation. Empirical results show that the decentralized supplier will achieve maximized profit when demand increases while the centralized supply chain will achieve maximized profit when demand decreases. And after a tradeoff between order cost and supply stability, the retailer will prefer to cooperate with the stable supplier; when supply and demand are both uncertain, only the stable supplier will be affected.

Key words: supply chain, supply disruption, demand disturbance, competition & cooperation, game