Product assortment and components replenishment policy with customer-driven demand substitution
LI Yu-yu1,2, DAN Bin1, HUANG Bo1
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1. College of Economics and Business Administration, Chongqing University, Chongqing 400044, China;2. College of Computer and Information Science, Chongqing Normal University, Chongqing 400047, China
We proposed a product assortment and components replenishment model for product family ATO manufacturer based on customer-driven demand substitution and heterogeneous demand, under the assumption that product family ATO manufacturer assembles common components and specific components into family products. The optimal product assortment and parts replenishment policy for ATO manufacturer was obtained, and the method of finding the best solution was proposed. Theoretical and numerical analysis show that the optimal length of selling products, which is independent with the potential total demand per time of product family, is only related with product prices, procurement prices and holding costs per unit per time of components, and when sales price of a product increases, the manufacturer should extend the period of selling it, and shorten the period of selling the other products in order to enhance manufacturer’s profit.
LI Yu-yu
, DAN Bin
, HUANG Bo. , {{custom_author.name_en}}.
Product assortment and components replenishment policy with customer-driven demand substitution. Systems Engineering - Theory & Practice, 2011, 31(3): 471-479 https://doi.org/10.12011/1000-6788(2011)3-471