Co-evolution of product family configuration and supplier selection: a game-theoretic bilevel optimisation approach

Joint decision making of configuration design and supplier selection has been well recognised for successful development of modular product families. However, the prevailing practice for integrating supplier selection into product family design is limited to only one family generation and neglects the changes in customer demands and technological progress over time, which calls for a co-evolution design across product generations from a systematic perspective, instead of separating optima.In this paper, the co-evolution of configuration design and supplier selection for a product family is regarded as a distributed collaborative decision making, for which a Stackelberg game theoretic decision framework is proposed to model the interactions between product family planning in the current generation and product family re-planning in the next generation. Consistent with the Stackelberg game, a nonlinear bilevel optimisation model with a common deviation objective function, compromising an upper-level planning optimisation and a lower-level re-planning optimisation, is formulated. A corresponding nested bilevel genetic algorithm is developed to solve the optimisation model. A case study of mobile phone product family co-evolution with supplier selection is reported to illustrate the feasibility and potential of the proposed collaborative game theoretic approach.