Abstract: The distribution proportion of decentralized and centralized supply chains indicates the maturity of supply chain development. As it is well-known, decentralized and centralized decision-making modes are common in the supply chain game. Decision makers often adjust their decision-making process to the development for themselves day by day according to the changing market. In this paper, a study is conducted for a two-level supply chains composed of manufacturers and retailers. A payoff matrix in the game between the manufacturers and the retailers are constructed. With relevant parameters and numerical examples, evolutionary stable strategies are analyzed by using a Jacobi matrix. The effects of the parameter changes on the evolutionary direction between decentralized and centralized supply chains are discussed in detail. Results show that decision-making results are significantly influenced by parameters such as profits and costs in the supply chains.

Key words: decentralized and centralized supply chain, evolutionary game, decision probability