Product line selection and pricing under modular composition choices and inventory pooling strategy

摘要

Modularity is widely adopted in manufacturing industry as an effective method to balance market pressure for low prices and customer demand pressure for high product variety. Modular design can help to achieve high product variety easily and cheaply by altering different options for one component of the product. An effective inventory strategy is also important for reducing total cost. Under the inventory cost constraint, when the product variety is high, the inventory level of each kind of product will be relatively low and stock-out probability is likely to be high. On the other hand, the manufacturer who offers a product line with low product variety may face the problem of losing customers. In this paper, the problem of product line selection and pricing is studied. The impact of inventory pooling strategy and set-up cost on the product line selection and pricing is considered by proposing a mixed integer programme optimization model. The experimental results show that the proposed model and algorithm are effective.