Abstract: A two-pricing two-ordering policy with time and price sensitive demand is studied under demand uncertainty. The piecewise linear function is used to describe the price- and time-sensitive demand and the interval uncertainty set is constructed to describe demand uncertainty. Two Stackelberg game models are formulated according to whether the manufacturer gives a rebate to the retailer. Robust counterparts for the game models are developed and transformed into tractable programs. Numerical studies show that the uncertainty and price sensitivity of demand have influences on pricing, ordering and profit. The manufacturer and the retailer gain more from the game model with rebate, and the profits of both parties are decreasing in the uncertainty level and the price sensitivity coefficient of demand increase.

Key words: two-period supply chain, price and time-sensitive demand, demand uncertainty, Stackelberg game, robust optimization