Linking Product Variety to Order-Fulfillment Strategies

Frits K. Pil () and Matthias Holweg ()
Additional contact information
Frits K. Pil: University of Pittsburgh, 326 Mervis Hall, Pittsburgh, Pennsylvania 15260
Matthias Holweg: Judge Institute of Management, University of Cambridge, Trumpington Street, Cambridge CB2 1AG, United Kingdom

Interfaces, 2004, vol. 34, issue 5, 394-403

Abstract: Providing a variety of attributes in products is an important way of attracting customers, but it often increases complexity and managerial cost. We drew on two data sets collected in the automotive sector to explore the link between external variety (the variety offered the customer) and internal variety (the variety involved in creating the product). We found that these two dimensions can be independent of each other. External variety is problematic for firms producing to forecast, and handling internal variety is challenging for firms building products to order. The effectiveness of strategies to mitigate variety's negative effects, such as modularity, mutability, late configuration, and option bundling, depends on the order-fulfillment strategy the firm follows.

Keywords: inventory; production; policies; ordering; manufacturing; strategy (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://dx.doi.org/10.1287/inte.1040.0092 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:34:y:2004:i:5:p:394-403

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().