This paper aims to focus on duopolistic competition under dynamic price and production postponement for two differentiable products that share common product platform at a certain…
Abstract
Purpose
This paper aims to focus on duopolistic competition under dynamic price and production postponement for two differentiable products that share common product platform at a certain degree of product commonality.
Design/methodology/approach
Both price and production postponement modelling are benchmarked according to their profit in order to investigate the product substitutability effect to the profit and also their appropriateness to different competition situations. In addition, dynamic property is applied to show the demand changes effect of both strategic decisions (price and production) against demand uncertainty.
Findings
The results show that the pure price postponement is appropriate to be applied into highly customized products while pure production postponement to configurable products.
Research limitations/implications
Price and production postponement decisions help managers to optimize product development as well as production strategy by considering demand and supply sides.
Practical implications
Price and production postponements give alternative ways to managers for deciding on how to produce products as fighting product and mass customized product.
Originality/value
Innovative price and production postponement models are the novelty of this paper.
Details
Keywords
This paper aims to focus on production ramp up modeling on built‐to‐order (BTO) manufacturers facing customized demand. The general purpose is to present a novel approach to…
Abstract
Purpose
This paper aims to focus on production ramp up modeling on built‐to‐order (BTO) manufacturers facing customized demand. The general purpose is to present a novel approach to managing collaboration, by considering information exchange between the manufacturer and the supplier.
Design/methodology/approach
The methodology applies feedback control mechanism to analyze supplier responsiveness and customer order decoupling point to represent the need for collaboration. A two‐stage game is applied ahead of control system application to optimize the capacity decision, with the ultimate goal being profit maximization.
Findings
The results show that a higher product commonality degree gives more opportunity for quick response BTO supply chains, which are managed by feedback control, and at the same time to possibly mitigate the bullwhip effect caused by demand information noise.
Research limitations/implications
The analytical model here focused on one product family development, so the applicability of the proposed model to the whole product portfolio should be investigated in the future.
Practical implications
This paper helps the manufacturer to act optimally by considering the possibility of information exchange with the supplier and deciding on the product commonality degree, in taking into account the customer's lead time requirement.
Originality/value
A control system model of “BTO Supply Chain” is proposed by including product commonality and response analysis in the simulation model. Furthermore, a contribution to collaborative supply chains is shown by applying a synchronized supply model to represent supplier and manufacturer communication.