Analysis of Game Theory Models And Their Application In Inventory Management

Abstract

This study examines the application of game theory models in inventory management, highlighting their pivotal role in optimizing strategies under uncertainty and competition. Frameworks such as Nash equilibrium and cooperative games allow organizations to navigate challenges like demand fluctuations and stockouts more effectively. The analysis shows that integrating game theory enhances understanding of supply chain dynamics, leading to better decision-making, improved service levels, and reduced costs. A comparative assessment with traditional methods demonstrates significant advantages, including enhanced inventory turnover and lower holding costs. The study suggests that future research should explore the intersection of game theory with emerging technologies, such as artificial intelligence, to further refine inventory strategies. By adopting these advanced methodologies, businesses can better adapt to evolving market complexities and address both current and future challenges in inventory management.