Stockkeeping and controlling under game theoretic aspects

Fandel, Günter GND; Trockel, Jan GND

The stock level in industrial companies is frequently subject of critical discussions. Material managers tend towards high stock levels to ensure delivery and operational readiness. In contrast, controllers demand lower stock levels to minimize the costs of capital commitment. This decision conflict – based on lateral perception – can be modelled using an approach of game theory and it can be analysed in view of decision theory. This is the central object of this article. The consequences of decisions of the material manager and the controller in a company will be analysed if their actions result in different payoffs. Both the warehouseman and the controller each have two different alternatives to choose their own behaviour from with a specific probability. The material manager can select a low stock level at the risk of shortfalls or he can select a high stock level to ensurce delivery disposition. The controller can check the economic efficiency of the stock level on a low or a high audit level. With respect to the different strategy conditions and the respective payoffs we show the existence of noncooperative Nash equilibria in dependence of specific probabilities by which the players choose their strategies. Following these actions the top management analyses how far the players have pursued the economic efficiency of the company and how far the company was damaged because of the choice of their actions. This damage can be exposed by the top management with a specific probability. Additionally, the analysis will provide the management with informations, how the payoffs should be specified in order to reduce the probability of bad stockkeeping and bad auditing.




Fandel, Günter / Trockel, Jan: Stockkeeping and controlling under game theoretic aspects. Hagen 2008. FernUniversität in Hagen.


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