EconPapers    
Economics at your fingertips  
 

Optimization of strategic planning processes for configurable products

Edward Lawrence Umpfenbach, Evrim Dalkiran, Ratna Babu Chinnam and Alper Ekrem Murat

Journal of the Operational Research Society, 2018, vol. 69, issue 11, 1834-1853

Abstract: Assortment planning aims to select the set of products that a retailer or manufacturer will offer to its customers to maximize profitability. While assortment planning research has been expanding in recent years, current models are inadequate for the needs of a configurable product manufacturer. In this paper, we develop models integrating assortment planning and supply chain management decisions for the strategic planning of a large automaker. Our model utilizes a multinomial logit choice model transformed into a mixed-integer linear program through the Charnes–Cooper transformation. It is able to scale to problems that contain thousands of configurations to possibly be offered, a necessity given the number of possible configurations an automaker can build. In addition, most research in assortment planning contains simplified costs associated with product complexity. We better account for design, integration, manufacturing, and supply chain complexities that stem from large product assortments. We believe that our model can significantly aid automotive manufacturers to balance their product complexity with supply chain complexity to improve profitability of vehicle programs. We also present results from a case study motivated by a large global automotive original equipment manufacturer.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1057/s41274-017-0287-3 (text/html)
Access to full text is restricted to subscribers.

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:taf:tjorxx:v:69:y:2018:i:11:p:1834-1853

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tjor20

DOI: 10.1057/s41274-017-0287-3

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald

More articles in Journal of the Operational Research Society from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-03-20
Handle: RePEc:taf:tjorxx:v:69:y:2018:i:11:p:1834-1853