Packaged gas supply chain planning with network-wide SKU rationalization

Ethan Malinowski, Mark H. Karwan, Lei Sun and José M. Pinto

International Journal of Production Economics, 2018, vol. 204, issue C, 346-357

Abstract: Effective SKU rationalization is advantageous when applied to businesses with a high variety of product offerings. Advantages may include lower production costs, inventory simplifications, and system-wide reductions in transportation costs. We apply SKU rationalization in the form of a variant of product substitution, towards an industrial packaged gas supply chain problem which includes production, allocation, and distribution decisions. An effective mixed-integer programming formulation is developed, capable of handling additional line investment, varying degrees of substitution, economies-of-scale in production, as well as network-wide planning decisions in the supply chain. A case study based on historical data is used for testing, followed by computational results and policy implications in the form of customer incentivization.

Keywords: SKU rationalization; Product substitution; Packaged gas supply chain; Mixed-integer programming; Incentivization (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:204:y:2018:i:c:p:346-357

DOI: 10.1016/j.ijpe.2018.08.013

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