A product line design and strategy model for manufacturing and marketing tradeoffs

• Main Author: Que, Wesley Manfred L.
• Format: text
• Language: English
• Published: Animo Repository 2023
• Subjects: Product lines; Marketing; Operations Research, Systems Engineering and Industrial Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6882
• Institution: De La Salle University

As the needs of consumers become more varied, companies have resorted to introducing product lines – sets of products with similar features – instead of individual products to address these needs. Because of this, the field of product line management has grown, where the decisions to be made involving the product line are tackled. Within this field, this study focuses on two main categories of decisions: product line design – the selection of products to be introduced, and product line strategy – the sequence and timing of introduction of the products. There have been several literatures on product line design, but product line strategy is a much newer topic, and none have integrated the two decisions into one problem. And within both fields, manufacturing and marketing factors are considered, namely, part-worth utility, cannibalization, cost synergy, product development time and cost, reconfiguration cost, demand diffusion and production capacity. Tradeoffs between these factors were hypothesized and then modeled through an optimization model solved using the genetic algorithm engine of Palisade Evolver. This study finds that factors initially limited to the product line design problem also affected the product line strategy problem and the other way around. Also, the capacity factor, which was initially a limiting constraint, is found to also have an effect on the product line strategy problem. Lastly, the demand factor is observed to determine the prioritization of the factors in both problems.