Conceptual framework and modelling methodology
Catherine Xiaocui Lou, Sardar M. N. Islam, Nicholas Billington · 2022
This chapter builds and justifies the conceptual framework that underpins the direction of this research. It discusses the elements of supply chain network management including manufacturing, distribution, inventory and marketing management with the incorporation of good corporate governance practices based on game theory and artificial intelligence. The framework is developed to lead to a robust optimisation model with output that includes optimal solutions and risk management strategies under uncertainty. The chapter shows step by step how corporate governance factors are included in supply chain modelling. Specifically, relationships between the elements of supply chain management and corporate governance are explained from a risk management perspective in financial flows and for the benefits of shareholders and company stakeholders. The robust optimisation method, founded on game theory and artificial intelligence, is defined and formulated. The proposed model is a principal–agent game theory model. It incorporates the interests, goals and strategies of both the principal and the agent in the structure of the model. The model answers the two issues of how corporate governance can be integrated into the supply chain model, and the impact of this integration on improving the performance of the supply chain provided by the underlying artificial intelligence element of the model.