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A Study on the Demand Switching for Multiple Products
|作者:||謝？？君||關鍵字:||應用研究;Demand Switching;管理科學;需求移轉;風險共擔;庫存管理;Risk Pooling;Inventory Management||摘要:||
Inventory management and related decision-makings have been critical when running a business; the variability of products' demand frequently attracts managers' attention because of its costly implications. By carrying high level of inventory, firms may satisfy customers' orders and materialize high revenue when demand is high, but often end up with excess inventory when demand is low. On the other hand, carrying low level of inventory to avoid the cost of excess inventory may result in a poor service level and loss of potential profit.It is already demonstrated that demand switching can be used by firms to take advantage of the risk pooling effect and meet the service requirement with less inventory and yield more profit. That is, a firm can improve its profitability by encouraging some of its customers, who intended to purchase one product to switch to buy other products with less variability in demand. This study confirms that demand switching may reduce the sum of demand variability and consequently increases the total profit. Even though this approach of demand switching is well developed, it is rarely found in the literature specifically regarding how the demand should be switched among products, and if there exists an optimum switching ratio when switching demand among multiple products.To answer the above questions, in this study we examine the problem where multiple products are available to customers. We intend to study the possible demand switching patterns analytically. Two cases of demand switching are considered: Merge-Switching and Burst-Switching. Our preliminary results showed that the profit increases with increasing switching ratio and is concave in the case of Merge-Switching, when there is no correlation among the demand of products. In addition, in the case of Burst-Switching, the profit increases with increasing switching ratio and is concave, regardless of the correlation among the demand of products. The assignment (or distribution) of the switched demand does affect the profit in both cases; under certain circumstances, there exists a maximum value of the profit in the case of Merge-Switching. We expect similar results in the case of Burst-Switching. The developed analytical framework shall facilitate practitioners in the inventory related decision-making process. Numerical examples are also included to verify the derived models.
|Appears in Collections:||科技管理研究所|
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