Firms employing market oriented supply chain management have two competing objectives, offering consumers the options and products they want and maintaining control on production costs. Our paper formulates a model to address the efect of supply chain costs on product line selection. The formulation is based on the product-line design problem first introduced by Green and Krieger [6] and midified by Dobson and Kalish [4][5]. To better understand what costs are involved we define supply chain costs in terms of product latitude and potponement. Besides adding a new variable cost structure to the product-design problem, we add constraints and redefine customer utilities as a function of price to assure the bi-criteria price and welfare maximization problem is bounded.
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