Article ID: | iaor20061891 |
Country: | Netherlands |
Volume: | 165 |
Issue: | 3 |
Start Page Number: | 748 |
End Page Number: | 764 |
Publication Date: | Sep 2005 |
Journal: | European Journal of Operational Research |
Authors: | Bassok Yehuda, Tibben-Lembke Ronald S. |
Keywords: | distribution |
We present a variant of the delayed customization problem in which the company considers using both regular production and postponement. We determine the optimal inventory levels for the generic product (to be used for postponement) and the regular products. Even when the use of the generic product is significantly more expensive than other products, maintaining an inventory of the generic product significantly increases profits. We present an algorithm to optimally solve the single period and heuristically solve the infinite horizon problems for any number of products, and present computational results.