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266906

Modeling and Optimization of Supply Chain Product Rollover Strategies

Article

Last updated: 04 Jan 2025

Subjects

-

Tags

Production Engineering

Abstract

Manufacturing companies operate in a fast-paced environment and accordingly, they must continuously respond to customers' requirements for improved and innovative products. The present research studies the application of solo and dual product rollover strategies in a supply chain that consists of manufacturers and distributors, with the focus on the production rollover strategies at the manufacturers echelon. A MILP model is developed for a multi-product multi-echelon multi-period supply chain with the objective of maximizing profit during period where the demand of the new product is replacing that of the old product through optimizing the sales, production, and inventory quantities, as well as the timing of the transition from the old to the new products in production and sales. The developed model considers the effect of demand, manufacturing capacity, inventory holing cost, selling prices, the opportunity cost of the lost sales, as well as the firm's choice of the production rollover strategy. The paper presents the results of a numerical example while considering a case of insufficient capacity and shows that dual production rollover strategy gives better results of total profit and average fill rate than the solo production rollover strategy. Finally, the study includes a sensitivity analysis carried out on the numerical example, from which it was found that the optimal solution for solo production rollover strategy is more sensitive than that of the dual strategy to the increase of the opportunity cost of lost sales as well as the increase in price ratio between the new and old products.

DOI

10.21608/pserj.2022.163701.1195

Keywords

Product rollover, product introduction, substitute products, Supply Chain, mixed integer linear programming MLIP

Authors

First Name

Jana

Last Name

Nazmy

MiddleName

-

Affiliation

Mars Wrigley Egypt

Email

j.nazmy@outlook.com

City

Cairo

Orcid

-

First Name

Raghda

Last Name

Taha

MiddleName

Bahaa

Affiliation

Department of Supply Chain Management College of International Transport and Logistics, Arab Academy for Science, Technology and Maritime Transport, Egypt

Email

raghda.bahaa@aast.edu

City

Cairo

Orcid

-

First Name

Amin

Last Name

El-Kharbotly

MiddleName

Kamel

Affiliation

Design and Production Engineering, Faculty of Engineering Ain Shams University Cairo, Egypt

Email

amin_elkharbotly@eng.asu.edu.eg

City

Cairo

Orcid

-

Volume

26

Article Issue

4

Related Issue

38267

Issue Date

2022-12-01

Receive Date

2022-09-18

Publish Date

2022-12-01

Page Start

56

Page End

71

Print ISSN

1110-6603

Online ISSN

2536-9377

Link

https://pserj.journals.ekb.eg/article_266906.html

Detail API

https://pserj.journals.ekb.eg/service?article_code=266906

Order

8

Type

Original Article

Type Code

813

Publication Type

Journal

Publication Title

Port-Said Engineering Research Journal

Publication Link

https://pserj.journals.ekb.eg/

MainTitle

Modeling and Optimization of Supply Chain Product Rollover Strategies

Details

Type

Article

Created At

22 Jan 2023