New Substitution Policies for Assemble-to-Order Systems with Exogenous Inventory Control

Several companies struggle with the problem of synchronizing supply and demand due to the dynamic nature of supply/demand processes. Product substitution is a common method that is used by companies such as IBM, Hewlett-Packard and Dell to match customer demand with available supply by steering customers towards product configurations that can be supplied easily and profitably. In this paper, we propose policies for identifying viable product alternatives that will maximize a company's profit by mitigating the effects of supply-demand imbalances.

By: Anshul Sheopuri; Karthik Sourirajan; Markus Ettl

Published in: RC24843 in 2009


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