A classification of the literature on the planning of substitutable products

Shin, Hyun-Mock; Park, Soohoon; Lee, Eun-Cheol; Benton, W. C.

doi:10.1016/j.ejor.2015.04.013

Cited by 84 publications

(36 citation statements)

References 94 publications

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“…(2012) [4] provided a review paper, which indicated that modeling the substitution and deterioration together is significant and could contribute to the existing research. This point is also confirmed by another review paper by Shin et al ( 2015) [5]. On the other hand, the integration of pricing decision with inventory problems has received much attention in the literature.…”

Section: Literature Reviewmentioning

confidence: 55%

Inventory Model with the Consideration of Pricing, Product Substitution and Value Deterioration

Chan

Ruan

Tai

et al. 2018

IFIP Advances in Information and Communication Technology

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Nowadays, due to the radical development for the e-commerce means, it becomes a trend to buy the products, especially the electronic products, directly from the manufacturers instead of retailers. It is commonly known that each entity in the market has the autonomy to deciding both the production/inventory plan and the pricing plan. Nevertheless, the existing research focuses either on the production planning or pricing. Using such approach can generate optimal solution for production and pricing, but the global optimal solution for integrated production planning and pricing is not guaranteed. Investigating the literature reveals that there are two literature review studies indicate that it is of great important to study the integrated model in production and inventory control problem with perishable and substitutable product. Therefore, this study aims to discuss the aforementioned problem by solving an inventory model with the consideration of pricing, product substitution and value deterioration. For this purpose, we propose a Mixed Integer Linear Programming model to represent our inventory model and develop a method to find out the best pricing strategy and its corresponding production plan. To demonstrate the validity of the proposed model, we present an example, the results reveal that our model can efficiently handle the proposed problem.

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Section: Literature Reviewmentioning

confidence: 55%

Inventory Model with the Consideration of Pricing, Product Substitution and Value Deterioration

Chan

Ruan

Tai

et al. 2018

IFIP Advances in Information and Communication Technology

View full text Add to dashboard Cite

show abstract

“…Further methodological research should relax model assumptions to cover a broader scope of applications. Substitution mechanisms concerning different areas of decisions: assortment planning, capacity planning, inventory decision, and pricing decision could be modelled, if the assumption of price exogeneity was relaxed (Shin et al 2015). Further empirical research could also examine the verification of model implications in different branches.…”

Section: Discussionmentioning

confidence: 99%

Using Portfolio Theory to Predict the Impact of Reduction in Product Width on Sales

Brzęczek

2016

Journal of Business Economics and Management

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Modern portfolio theory was applied to research product portfolio diversification. Prior research studies claimed a positive relationship between the number and variety of products and sales smoothing. However, they have also argued the limitations of classical portfolio analysis, especially owing to the assumption of independence of portfolio shares and the static nature of the approach. To address this limitation we extend the model to fit the trend and seasonality of sales, and to cover their correlations. The model aims to predict the impact of product width reduction on sales and their volatility. We consider the reduction of a product category in portfolio. The model covers the impact of product category sales on portfolio sales but also on other product category sales. Finally, we verify the model using a wholesaler company’s data and compare results. Hence, we recommend the model for the prediction of changes in sales and their volatility due to product category reduction. The model covers the portfolio dynamic approach to product width under the assumption of price taking, unlike in product assortment and variety planning models.

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“…Customers may not always be able to find a preferred product, which results in unmet demand that is often substituted with an alternative (Shin et al, 2015). Therefore, pricing strategies of substitutable products have become a popular research area in the supply chain management.…”

Section: Optimal Pricing Strategies Of Substitutable Products In Suppmentioning

confidence: 99%

Pricing decisions for substitutable products with green manufacturing in a competitive supply chain

Zhang

Hong

et al. 2018

Journal of Cleaner Production

104

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In this paper, we examine the pricing strategies in a two-stage supply chain with two competitive manufacturers and one retailer. We address six game models: the centralized model (Model I), the MS-Bertrand model (Model II), the MS-Stackelberg model (Model III), the RS-Bertrand model (Model IV), the RS-Stackelberg model (Model V) and the cost-sharing contract model (Model VI) to explore the optimal pricing strategies of substitutable products. We address the optimal green manufacturing level, retail prices, wholesale prices and the profits of supply chain members as well as the whole supply chain under different models. Numerical examples are provided to demonstrate the efficiency and effectiveness of the proposed models. First the impact of green investment on the green manufacturing level and supply chain performance is examined. Then the impact of price elasticity, cross-price sensitivity and green manufacturing coefficient on the green manufacturing level is analyzed. We find that the centralized model is the best, and the cost-sharing contract model will be better than the four decentralized models when the cost-sharing proposition is in a certain interval. Additionally, in decentralized scenarios, the Stackelberg model has an advantage for manufacturers while the Bertrand model is superior for the retailer. Our results also indicate that green manufacturing will benefit the manufacturer involved in green investment.

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A classification of the literature on the planning of substitutable products

Cited by 84 publications

References 94 publications

Inventory Model with the Consideration of Pricing, Product Substitution and Value Deterioration

Inventory Model with the Consideration of Pricing, Product Substitution and Value Deterioration

Using Portfolio Theory to Predict the Impact of Reduction in Product Width on Sales

Pricing decisions for substitutable products with green manufacturing in a competitive supply chain

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