Next, we evaluate the performance of the heuristic policy. Tables 1 and 2 compare the prof- its obtained by the optimal and the heuristic policies for 24 example problems each for systems consisting of three and four identical components, respectively. For each problem, we report the profits per unit time obtained by the optimal policy, our state-dependent heuristic policy and an independent “strawman” heuristic policy we picked from the literature. As opposed to our heuris- tic policy described above, the “strawman” heuristic policy is a base-stock/rationing policy for each product where a base-stock and a rationing level is set independently for each product which ignores the inventory levels for all other products. For the three- and four-component problems, we identify the independent base-stock and rationing levels by an exhaustive search on the state space. At each decision epoch corresponding to a production opportunity, the strawman heuristic policy leads to the production of another unit of the product only if its current inventory level is below its independent base-stock level. Similarly, at decision epochs corresponding to demand arrivals, a demand for the product will be accepted only if the product’s inventory level is above its independent rationing level. Independent base-stock and rationing heuristic policies are commonly used in the related literature such as in the works of Song et al. (1999) and Benjaafar et al. (2010). For each problem instance, the profits reported for the optimal policy is obtained by solving the corresponding MDP by value iteration algorithm with a five-digit accuracy termination criteria. For our heuristic policy, we first solve the N + 1 constructed MDPs, recording the decisions for each component and product, and then apply these decisions for the original-sized MDP. For the independent base-stock and rationing policy, we first identify the appropriate base-stock and admission threshold levels for each component and product which are then implemented in the value iteration algorithm.
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On the basis of satisfying basic customer demands in the process of product development, strengthening meet the personalized customer demands which has high attention can improve the market adaptability and competitiveness of products. First of all, investigate to obtain the customer demand information, and then quantify customer demands weights by using variation coefficient method. Secondly, analyses the relationship between customer demands and product development time and cost based on the quality function deployment and establish corresponding mathematical model. On this basis, put forward the concept of customer demand saturation and optimization decision method of product development, and then apply it in the notebook development process of a company. Finally, when customer demand is saturated, it also needs to prove the consistency of strengthening satisfies customer demands and high attention degree customer demands, and the stability of customer demand saturation under different parameters. Prove the correctness and effectiveness of concept of customer demand saturation and the decision method in the end.
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Both Figures 5a and 5b have five panels to organize elasticities into five different age groups. Interestingly, Figure 5a displays quite different patterns from Figure 5b. Particularly, in Figure 5a, where no age variable is incorporated, the predicted price elasticity of demand is more or less independent of age, represented by similar patterns of the scatters across the five panels of different age groups. In Figure 5b, however, each of the five panels depicts a very different scatter from the others. Generally, the predicted elasticity is relatively small (in absolute term) when the product is young and it goes up gradually as the product gets older. For instance, within the first 6 months of introduction, the price elasticity is small and similar across the whole price range; almost no product is highly price elastic. Then, there are a few mid-range products whose price elasticities jump up during the next 6 months period (see panel titled 12). In the meantime, the price elasticities for most low- to mid-end cameras climb up slightly (in absolute term). In the third panel, where products age from 13 to 18 months, a lot more products become more price elastic, and on average the predicted elasticities for the low- to mid-end cameras increase. Such growth trend continues for older age groups. In the last panel, where observations are of 25 months or older, the number of products with a high price elasticity is larger despite a smaller number of total observations. These characteristics of price elasticity are also observable by the median belt plotted in the graphs. Figure 5b demonstrates that earlier buyers of a camera are much less price-sensitive than later purchasers, which seems to be consistent with conventional beliefs that impatient and price insensitive consumers enter the market early. Therefore, the inclusion of the age factor appears to effectively control for the variation in the consumer group that purchases each of the identical products. 10 Typically, higher-priced fresh and young
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In this study we attempt to connect a two-period newsvendor setting with product extension and inadequate stock strategy. The item in the second period is a product extension of the item in the first period. An inadequate order size is purposely placed in the first period so as that some of the first item’s unsatisfied demand will transfer to the second period in a purpose of enticing much more sales toward the second item. Three merits of our system comprise that (1) the first item’s sales information could provide a revision guideline to ameliorate the second item’s primary demand; (2) for those shifting demand, a higher profit margin in the second period is usually allowed, and this will help improve overall profit performances; (3) possible effects, such as an increasing primary demand, an increasing error demand and even a cheaper item 2’s purchasing cost due to manufacturer’s promotional techniques, manufacturing machine’s improvement and staff technology promotion, would likely be simultaneously triggered in the second period to stimulate more buyers and create more profit as well. Also, the following questions will be respectively resolved in the course of this study. (1) How to determine the two order sizes and the two selling prices that maximize the overall expected profit? (2) Whether or not our system is always outperforming the classical newsvendor setting from profit performance’s standpoint? (3) How would the first item’s order size influence the profit performances? (4) Is there any restriction of the two selling prices to ensure that our profit is always better off than that in the classical newsvendor setting? (5) What will the three triggered effects impact on
The value of any offering is realised in its use which does not necessarily require the transfer of asset ownership (Vargo and Lusch, 2008). Product and service offerings can be substitutes for each other. Demand for digital ‘service’ output has been displacing tradition physical goods in the creative industries (Edwards et al., 2011), a process likened to the servitization of manufacture (Parry et al., 2012). Digitization means supply chains have fundamentally changed (Graham and Smart, 2010) with costs of production and distribution significantly reduced (Byrne, 2012). However, customers are less willing to pay for digital content (Oberholzer-Gee and Strumpf, 2007) creating challenges for these industries related to the operation of firms in the market and consumers illegal file sharing activity (Bustinza et al., 2013). This paper focuses only upon the supply chain management challenge.
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For the concerned sample, there appeared a rising demand for more organic product variety and significance of price-quality relationship for more educated consumers with higher income potential was prevalent. Accordingly, focusing on marketing efforts emphasizing product value can contribute positively to rising education and information access of the potential consumers. In this means, departing from even this small sample of Romanian consumers, rising information on product and product value, enriching distribution channels and providing more venues and reaching them with proper communication tools are expected to contribute in domestic marketization of organic products. It is expected that these efforts may meet the marketing targets in Romania, where number of producers is rising with a high speed apparently. When the findings retrieved from Turkish consumers was evaluated in the same framework, it can generally be inferred that organic marketization in Turkey falls behind. Hardship to leave traditional consumption preferences can be understood from the importance of taste for female consumers specifically. Yet, taste loses its importance in consumption preferences with rising age and this is actually related with healthy nutrition considerations for elderly. With rising income price sensitivity and taking price as the reference point in consumption decisions declines and this is in conformity with expectations. In addition, when the linear relationships were overviewed, prevalence of advertising efforts declines for employed population and with rising education. This inference sets forward the need to present alternative promotional tools.
In the course of product development, focusing on demands can improve the adaptability and competitiveness of enterprises. However, excessive meet customer demand will increase development costs and time. Therefore, a balance between demands and development costs and time must be made to control the situation. For development costs, development speed and the benefit of meeting demands, Hou (1998) analyzes the three elements of the issue. He defined the problem as "The balanced in new product development features value and the benefit." The three elements of the development process are as follows.
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practice innovative principles and methods to their product and service functions to enable them to compete within the markets while reducing the product life cycle and lead times to meet the demands . Researchers identify product innovation as a critical element to the success of the product which is highly related to the sustainable business success in turn providing better business opportunities for growth, expansion and maturity within new areas. Similarly, process innovation refers to the aspect of using new innovative production and operations methods and using new technological advancements such as additive manufacturing to improve their overall production processes. Similar study has emphasized heavily upon process innovation that could result in product innovation and likewise product innovation which could force process innovation on manufacturing organisations. This further proves that there is a strong linkage of product and process innovation that should be considered as an important factor during the NPD process . Finally, market innovation is considered as a newer approach which companies have been adopting in order to scale and utilise the target market. This is also linked to the wider discussion of innovation and especially product innovation towards market research, advertising and promotion, which also relates heavily towards using the four Ps concepts for any new opportunities within the market, including entry and threats of new markets. The concept of market innovation is very central and important to product innovation and likewise product innovation is the central focus for product novelty . C. NPD and Demand Chain Management
Abstract: In this paper, we have developed a two- stage supply chain production inventory model for deteriorating product with time-dependent demand. Shortages are allowed in the retailer’s inventory. This model is developed for finite time horizon. In reality, it is seen that if the manufacturer produces a huge amount of product, it may incur holding cost and moreover the items may get damaged or deteriorated incurring the cost for deterioration. On the other hand, an insufficient amount of product may result in shortage incurring penalty cost. Therefore, to balance these two unwanted situations, the manufacturer will fix the production rate as demand dependent. To make this study close to reality the production rate is assumed to be a function of demand rate. A numerical example and sensitivity analysis with respect to different associated parameter is also presented to illustrate the study.
Alternative solutions such as “postponement and mass customization” can be replaced by focused groups or test marketing in order to enhance the forecasting accuracy by better dealing with the uncertain market reactions (Ogawa and Piller, 2006). In postponement strategy, manufacturer predesigns the product and manufacturing process is divided to two different stages. First generic components are built to stock and then once the company got the information regarding the market demand, the parts will be assembled into final goods. However, mass customization strategy is reverse and the customer design their own products using a configuration system by choosing their preferences an then the products are being manufactured on demand. Both these strategies provide opportunity for more flexibility while minimizing the risks of NPD, however they still require a redesign of both processes and products which impose higher costs at the operational level (Ogawa and Piller, 2006). Moreover, keeping smaller lot sizes requires complicated purchasing patterns and manufacturing operations. Besides, mass customization necessitates an “elicitation system” for transferring individual preferences to precise product features. The two mentioned strategies are more discussed through literature rather than industry applications (Ogawa and Piller, 2006).
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With growing economy, market competition becomes stronger. Facing such challenges, companies try to decrease their overall cost while attempting to maintain high customer satisfactions. One of the effective methods is to make forecast for the future demand in advance to predict sales which is used for successive operation planning and management. Accurate and effective demand forecasting can produce precise prediction of future sales which can significantly reduce management cost, inventory cost and transportation cost. When there is historical data, we are able to identify the number of demand each year and can control the production. When dealing with new products, there are some problems that need to be considered. First, new product forecasting has low credibility and low accuracy because there is no historical data to base on. Rather many conclusions are based on assumptions only. Second, the time to forecast new product is longer because it requires more manual attention. Finally, researchers face the problem of data uncertainty and data scarcity when it comes to new product. This research deals with all these problems of forecasting vehicle demand and to determine which method is the most appropriate for forecasting new product.
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Gustavsen and Rickertsen, 2006) and this is expected to bolster the demand for vegetables as consumers become more health-conscious. However, cognisance must be taken of findings that the consumption of vegetables for health reasons is largely a consideration of consumers who already have adequate levels of calorie intake. Block et al. (1992) indicated that the health benefits of eating vegetables accrue from reduction in the incidence of various forms of cancer, as well other ailments such as stroke, heart disease, and obesity. However, although the per capita consumption of vegetables is showing an increasing trend, it is still low in South Africa, particularly among low-income consumers. But the per capita consumption of vegetables in South Africa is expected to rise in response to improved standards of living and growing health concerns among consumers (Arshad and Hameed, 2007). There is also the emergence of research to promote healthy eating as a means of increasing market access for smallholder farmers in South Africa (Mkhabela, 2011).
It is important to understand that each of the above mentioned types of models include the social and psychological base as a base on which are built the basic elements of the higher educational institution in each country separately. I.e. the main role in the formation of the forming criteria in the education in the existing models belongs to the organization in the industry that forms a product, meeting the demand and expresses a desire to join in the process of educational system of the existing models. But how fits in the mentioned models the consumer – a foreign student? Is the product offered by an organization in the industry which is in demand or will be in demand with the consumer – a foreign student and whether there is a model in which the organization functions in the industry, meeting the requirements of the consumer – a foreign student for satisfaction of needs? In this regard, it should be added that in the presented types of models is traced the determining initiative of the forming criteria of education which belongs as a rule to one of the parties that disturb the process of interrelation within the industry and is not a positive and promising in the solution of integration process of consumer – a foreign student and violation of the chain of interrelations (Figure1).
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In this modern manufacturing scenario, matching of supply and demand has become a major challenge to thrive for the manufacturing companies . However, the proper APP helps matching supply and demand while reducing total costs. The aggregate plan output consists of the total quantities of each product or product group to be manufactured during the scheduling period of the various manufacturing activities required to achieve the planned levels of production. It intends to set general manufacturing objectives and to help plan the accessibility of additional inputs and support operations to fulfill manufacturing objectives. There are various types of mathematical techniques and models to perform the task of APP.
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of the expenditure ratio. And this balancing in turn means that profits and losses add up to zero. By the same token, cumulated savings/dissavings add up to zero. Figure 4 tells us that in period 50 the budget is (virtually) balanced and the product market is cleared. Nevertheless, despite of the satisfactory outcome ‘in the long run’ there is a problem because the agents cannot know this in period 10, for instance. Beginning with this period, the variations of the expenditure ratio produce losses and the involved agents do not know whether they cancel out in the sequel. There is neither market failure nor price stickiness, the households act in full accordance with their time preferences, yet, with losses the system comes under stress. The ‘temporary’ lack of nominal demand brings the business sector in an awkward position vis-à-vis the central bank. Neither the business sector nor the central bank knows how long ‘temporary’ may last and how bad it may get.
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Results from the MILP model and the GA are compared in Table 7. As can be seen, in the standard case as taken from Lakhdar et al (2007), the GA solution has lower manufacturing costs, i.e., utilises better the low-cost facilities, and lower storage costs. It also manages to satisfy all the demand (customer service level of 100%), whereas the MILP model chooses to backlog some of the demand. This is because the GA tries to satisfy all the demand as first priority and only backlogs if there is no other feasible option. The MILP, however, has an explicit trade-off between backlog and other costs, and backlogs if the resulting solution has a higher profit. On the other hand, the setup costs of the GA solution are higher. Overall, the profit generated by the GA solution is consistently higher, and by more than the 0.25% optimality gap, i.e. the difference between the best solution found and the upper bound determined by the MILP solver. This is possible because MILP, due to its imposed time granularity, has an artificially restricted search space. It can switch less often between products, resulting in lower setup cost and higher storage cost. Also, it sometimes wastes part of a time period, which may mean the need to use occasionally more expensive facilities, resulting in higher manufacturing costs. These differences can be seen also by comparing the Gantt charts of the optimal solutions found by the MILP and the GA which are depicted in Figure 2. The Gantt chart of the MILP solution generally shows shorter campaigns (sequences of batches of the same product), and, especially visible on facility i4, small gaps between production in different time periods, simply because the time period (of 90 days) is not equivalent to a duration spanned by a multiple of batches for this product in this facility. The schedule optimised by the GA has longer un-interrupted idle time, which may be advantageous if a new product is introduced to the facility or if a third party is seeking to rent and use production capacity.
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producers who have several product and markets. All marketing models are seeking to maximize the profit of company by suitable market to sell the products, as common marketing methods are used for this job. In this study, because of assuming the marketing via IT, which addressed the shortening of the marketing time, decisions are taken immediately and then reported to the superior manager, that is, by its on-line mechanism, this company can specify the potential customers, their geographical place and volume of their demands and then compare them with the same companies and finally report the results to the supplier company. Thus, the structure of such system through the design of information systems should be configured. As we said, the marketing aims to identify different markets, which result in profit-maximizing of company. Therefore, given attention that the benefit is yield of the difference between revenue and cost and the income is calculated by multiplying the price with by the number of demands. Consequently, in order to maximize profits, the company must set prices for products in different markets. The Price for customer, by considering the price on ledge to ledge point and the price with desired parentage of profit, as well as having in mind the demand rate and with the help of mathematical models of pricing, is obtained. Due to the determined prices for different products in different markets, we can calculate the expected profit. And because the recognized markets are potential, so, we cannot give exact and accurate opinion about income and amount of sale and also there are unpredictable agents in decision making, especially in immediate decisions under IT, so, in this case, the considered risk a yield of the probable distribution of sales and potential customers. Whereas, the risk affects on the rate of expected demand and this amount also affects on the profit, finally, the effect of risk on profit rate cane seen.
Bullwhip effect is present in Supply chain of manufacturing industries which highly dependent on many numbers of suppliers. Due to bullwhip effect OEM demand of finished Products and demand of raw of materials means demand of upper stages of chain are highly fluctuated. OEM has different suppliers for each raw material used in production of the Product. So for good relationship with suppliers it is required to give stable orders to suppliers so that they can fulfill the OEM demand successfully. After choosing accurate forecasting method for Product and implementing it into actual production, OEM demand fluctuation of finished products and mostly the demand fluctuation of required raw materials for the Product is highly reduced and demands are stabilized. According to OEM raw material demand, Suppliers are given the orders of the raw materials. So this stabilization of OEM raw material demand will be more beneficial to the suppliers of OEM as well as for OEM.
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From the Economists’ point of view, firms should seek the price which maximizes profit and will thereby obtain the most efficient use of the economic resources held by the firm. This price is at that level of sales where the addition to total revenue from the sale of the last unit (the marginal revenue, MR) is equal to the addition to total costs resulting from the production of that last unit (the marginal cost, MC). The economic theory is more concerned with the behavior of aggregates or markets, particularly how persistent and widespread behavior leads to stable results called equilibrium. One important aspect of the economic perspective is to realize that it views the firm as a price-taker rather than a price-maker. This means that management only determines the quantity of a product to produce, and the market sets price through the forces of supply and demand. In contrast to the economists’ point of view, the marketing perspective views price as a decision variable, instead of a given variable. In line with the marketers point of view, price is a decision variable influenced by various factors (Lucey, 1996; Monroe, 2003). Pricing is the only element in the marketing mix that creates sales revenue, the other elements are costs. Price is the amount of money we must sacrifice to acquire something we desire. (Monroe, 2003; Oyeniyi, 2004). Prices determine what products and services should be produced and in what amounts. Prices determine how these products and services should be produced, and for whom the products and services should be produced (Lawal et al, 2007).
Likewise, I consider the equity market corresponding to a company operating in single product economy. Economic forces acting on the equity market reflect the inherent market forces of demand and supply complemented with the economic forces operating on the product market and the equity market (Krouglov, 2006). Interactions on the equity market are expressed through a system of non-homogeneous ordinary differential equations. When there are no disturbing economic forces, both the product market and the equity market are in equilibrium positions, i.e., the supply of and demand for product and the supply of and demand for equity are equal, the quantities of supply and demand are developing with a constant rate and the prices of product and equity are fixed.
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