### Stochastic bilevel model

Posted:

**Wed Jan 24, 2018 10:50 pm**Hello GAMS community,

I'm trying to build a model that includes a Stackelberg game of a supplier and a retailer, the latter facing stochastic demand.

My idea is a combination of bilevel programming and stochastic programming, both supported by EMP.

The code I've created so far is running. The solution, however, isn't right.

I suspect that the follower's objective function is being optimised only in the first scenario, as his sales quantity in each scenario is equal to the demand in the first scenario.

Although, the equations are getting solved, i.e. the non-decision variables are correct.

Is there a way to combine bilevel programming with stochastic programming via EMP?

Is there another (if EMP is working more powerful) way to model the mentioned scenario?

Cheers

Felix

P.S.: I'll post the code, if you need it. It's a bit chaotic right now as I've tried changing the order of statements, which sadly didn't have any effect.

I'm trying to build a model that includes a Stackelberg game of a supplier and a retailer, the latter facing stochastic demand.

My idea is a combination of bilevel programming and stochastic programming, both supported by EMP.

The code I've created so far is running. The solution, however, isn't right.

I suspect that the follower's objective function is being optimised only in the first scenario, as his sales quantity in each scenario is equal to the demand in the first scenario.

Although, the equations are getting solved, i.e. the non-decision variables are correct.

Is there a way to combine bilevel programming with stochastic programming via EMP?

Is there another (if EMP is working more powerful) way to model the mentioned scenario?

Cheers

Felix

P.S.: I'll post the code, if you need it. It's a bit chaotic right now as I've tried changing the order of statements, which sadly didn't have any effect.