An inventory model for delayed customization: A hybrid approach

An inventory model for delayed customization: A hybrid approach

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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: ,
Keywords: distribution
Abstract:

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.

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