Browsing by Subject "Product variety"
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Item Open Access Assortment planning in transshipment systems(2015-08) Dağ, HilalAssortment planning, i.e., determining the set of products to offer to customers is a challenging task with immediate effects on profitability, market share and customer service. In this thesis, we study a multiple location assortment planning problem in a make-to-order environment. Each location has the exibility to access others' assortments by transshipping products he/she does not keep. This allows them to offer higher variety and increase sales without increasing costs associated with assortment. Customer behavior is defined using exogenous demand model where each arriving customer to a location chooses a product with an exogenous probability among all possible options. In our multiple location setting, we assume that the customer has access to the complete assortment in all locations. If a customer's requested product is not available in that customer's assigned location but available in another location, the firm ships the product to the customer at the same price and incurs a transshipment cost. If his/her first choice product is not offered by any of the locations then he/she switches to a substitute product, which can be either satisfied from customer's assigned location, or by transshipment. Otherwise, it is lost. The problem is then to determine the assortment in each location such that the total expected profit is maximized. We first show that the optimal assortments are nested, i.e., the assortment of a location with a smaller market share is a subset of the assortment of a location with a larger market share. We then show that while the common assortment is in the popular set (i.e., some number of products with highest purchase probabilities), the individual assortments do not necessarily have this property. We also derive a sufficient condition for each assortment to be in the popular set. In the final part of the thesis, we conduct an extensive numerical study to understand the effects of various parameters such as assortment cost and transshipment cost on optimal assortments and effects of allowing transshipments on resulting assortments compared to a no-transshipment system. Finally, we introduce an approximation algorithm that benefits from the structural properties obtained in this study and also test its performance with extensive numerical analyses.Item Open Access Impact of product variety on inventory performance : an empirical analysis of pharmaceutical and medical device industries(2012) Aydınlı, Ali YağmurIn this thesis, we construct empirical models to analyze the effect of various financial measures and product variety on inventory performance. We apply multiple regression models and simultaneous equations models using 2010 financial data for 128 U.S. firms in pharmaceutical and medical device industries. Using multiple regression models, we investigate the correlation of inventory turnover with product variety, gross margin, capital intensity and type of the firm. Product variety data are obtained from U.S. Food and Drug Administration. The best multiple regression model explains 38.50% of the total variation in inventory turnover and we observe that inventory turnover is negatively correlated with product variety. Since inventory turnover is the ratio of cost of goods sold (sales) to inventory level, a change in product variety might have an effect both on inventory level and cost of goods sold. In order to investigate the effects of product variety on cost of goods sold and inventory level separately, we employ simultaneous equation models. The best simultaneous equation model explains 96.22% of the variation in inventory level and shows that inventory level is positively associated with product variety.Item Open Access Management of product variety in cellular manufacturing systems(Springer, 2005) Akturk, M. S.; Yayla, H. M.In today's markets, non-uniform, customized products complicate the manufacturing processes significantly. In this paper, we propose a cellular manufacturing system design model to manage product variety by integrating with the technology selection decision. The proposed model determines the product families and machine groups while deciding the technology of each cell individually. Hedging against changing market dynamics leads us to the use of flexible machining systems and dedicated manufacturing systems at the same facility. In order to integrate the market characteristics in our model, we proposed a new cost function. Further, we modified a well known similarity measure in order to handle the operational capability of the available technology. In the paper, our hybrid technology approach is presented via a multi-objective mathematical model. A filtered-beam based local search heuristic is proposed to solve the problem efficiently. We compare the proposed approach with a dedicated technology model and showed that the improvement with the proposed hybrid technology approach is greater than 100% in unstable markets requiring high product varieties, regardless of the volumes of the products.Item Embargo Multi-plant manufacturing assortment planning in the presence of transshipments(Elsevier BV, 2023-05-31) Dolgan, Nagihan Çömez; Dağ, Hilal; Ünver, Nilgün Fescioğlu; Şen, AlperIn this study, we consider the assortment planning problem of a manufacturing firm with multiple plants. Making a plant capable of producing a product is costly, therefore the firm cannot manufacture every product in every plant. In case a customer’s order in a particular region is not available in the closest plant, another plant can ship the product using transshipment, but at an extra transportation cost. If a demanded product is not produced in any plant, substitution from first choice to a second choice is also considered, which can be either satisfied by the closest plant, or by transshipment. The problem is to jointly determine assortments in all plants such that total profit after assortment and transshipment costs is maximized. The resulting problem is complex as transshipments and substitutions are intertwined to affect assortment decisions. We show that the optimal assortments are nested, i.e., the assortment of a plant with a smaller market share is a subset of the assortment of a plant with a larger share. The common assortment of all locations is shown to be in the popular set (i.e., no leapfrogging in product popularities), and a sufficient condition on substitution rate is derived for each individual assortment to be in the popular set. We conduct an extensive numerical study to understand the effects of allowing transshipments on resulting assortments. Moreover, we introduce approximate assortment planning algorithms that benefit from the derived structural properties, which are shown to generate near-optimal assortments in a broad range of instances tested.