IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v269y2018i1p272-285.html
   My bibliography  Save this article

Promoting sustainability of automotive products through strategic assortment planning

Author

Listed:
  • Umpfenbach, Edward Lawrence
  • Dalkiran, Evrim
  • Chinnam, Ratna Babu
  • Murat, Alper Ekrem

Abstract

Assortment planning seeks to find an optimal set of products that the company should offer to its customers. Traditionally, it is a trade-off between offering larger assortments to maximize customer choice vs. smaller assortments to minimize costs associated with design, manufacturing, and distribution. Existing assortment planning models are quite lacking when it comes to configurable products such as automobiles and detail level of supply chain considerations. Further complications stem from increasingly strict environmental regulations and broader expectations for sustainable products and supply chains. We present a mixed-integer linear programming formulation for integrated assortment and supply chain network design models for automotive products to provide effective decision support and directional guidance to strategic product planners. Our models account for product use and supply chain emissions as well as fuel efficiency requirements. We also present an illustrative case study motivated by a global automaker to demonstrate the utility of the models and study the effects of sustainability requirements on the assortment and supply chain design.

Suggested Citation

  • Umpfenbach, Edward Lawrence & Dalkiran, Evrim & Chinnam, Ratna Babu & Murat, Alper Ekrem, 2018. "Promoting sustainability of automotive products through strategic assortment planning," European Journal of Operational Research, Elsevier, vol. 269(1), pages 272-285.
    • Handle: RePEc:eee:ejores:v:269:y:2018:i:1:p:272-285
    DOI: 10.1016/j.ejor.2017.08.031
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221717307622
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2017.08.031?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    2. Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
    3. Garrett van Ryzin & Siddharth Mahajan, 1999. "On the Relationship Between Inventory Costs and Variety Benefits in Retail Assortments," Management Science, INFORMS, vol. 45(11), pages 1496-1509, November.
    4. Dorothée Honhon & Vishal Gaur & Sridhar Seshadri, 2010. "Assortment Planning and Inventory Decisions Under Stockout-Based Substitution," Operations Research, INFORMS, vol. 58(5), pages 1364-1379, October.
    5. A. Gürhan Kök & Marshall L. Fisher, 2007. "Demand Estimation and Assortment Optimization Under Substitution: Methodology and Application," Operations Research, INFORMS, vol. 55(6), pages 1001-1021, December.
    6. Green, Paul E & Srinivasan, V, 1978. "Conjoint Analysis in Consumer Research: Issues and Outlook," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 5(2), pages 103-123, Se.
    7. A. Gürhan Kök & Marshall L. Fisher & Ramnath Vaidyanathan, 2008. "Assortment Planning: Review of Literature and Industry Practice," International Series in Operations Research & Management Science, in: Narendra Agrawal & Stephen A. Smith (ed.), Retail Supply Chain Management, chapter 0, pages 99-153, Springer.
    8. Preyas Desai & Sunder Kekre & Suresh Radhakrishnan & Kannan Srinivasan, 2001. "Product Differentiation and Commonality in Design: Balancing Revenue and Cost Drivers," Management Science, INFORMS, vol. 47(1), pages 37-51, January.
    9. Pinelopi Koujianou Goldberg, 1998. "The Effects of the Corporate Average Fuel Efficiency Standards in the US," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 1-33, March.
    10. United Nations, 2016. "The Sustainable Development Goals 2016," Working Papers id:11456, eSocialSciences.
    11. K. Sridhar Moorthy, 1984. "Market Segmentation, Self-Selection, and Product Line Design," Marketing Science, INFORMS, vol. 3(4), pages 288-307.
    12. Hans Sebastian Heese & Jayashankar M. Swaminathan, 2006. "Product Line Design with Component Commonality and Cost-Reduction Effort," Manufacturing & Service Operations Management, INFORMS, vol. 8(2), pages 206-219, May.
    13. Frits K. Pil & Matthias Holweg, 2004. "Linking Product Variety to Order-Fulfillment Strategies," Interfaces, INFORMS, vol. 34(5), pages 394-403, October.
    14. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    15. Stephen A. Smith & Narendra Agrawal, 2000. "Management of Multi-Item Retail Inventory Systems with Demand Substitution," Operations Research, INFORMS, vol. 48(1), pages 50-64, February.
    16. John Paul MacDuffie & Kannan Sethuraman & Marshall L. Fisher, 1996. "Product Variety and Manufacturing Performance: Evidence from the International Automotive Assembly Plant Study," Management Science, INFORMS, vol. 42(3), pages 350-369, March.
    17. Siddharth Mahajan & Garrett van Ryzin, 2001. "Stocking Retail Assortments Under Dynamic Consumer Substitution," Operations Research, INFORMS, vol. 49(3), pages 334-351, June.
    18. Gregory Dobson & Shlomo Kalish, 1993. "Heuristics for Pricing and Positioning a Product-Line Using Conjoint and Cost Data," Management Science, INFORMS, vol. 39(2), pages 160-175, February.
    19. Ekins, Paul, 1999. "European environmental taxes and charges: recent experience, issues and trends," Ecological Economics, Elsevier, vol. 31(1), pages 39-62, October.
    20. Ma, Hongrui & Balthasar, Felix & Tait, Nigel & Riera-Palou, Xavier & Harrison, Andrew, 2012. "A new comparison between the life cycle greenhouse gas emissions of battery electric vehicles and internal combustion vehicles," Energy Policy, Elsevier, vol. 44(C), pages 160-173.
    21. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-271, August.
    22. Serguei Netessine & Terry A. Taylor, 2007. "Product Line Design and Production Technology," Marketing Science, INFORMS, vol. 26(1), pages 101-117, 01-02.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Çömez-Dolgan, Nagihan & Fescioglu-Unver, Nilgun & Cephe, Ecem & Şen, Alper, 2021. "Capacitated strategic assortment planning under explicit demand substitution," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1120-1138.
    2. Yong Tan & Mike G. Tsionas, 2022. "Modelling sustainability efficiency in banking," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3754-3772, July.
    3. Çömez-Dolgan, Nagihan & Dağ, Hilal & Fescioglu-Unver, Nilgun & Şen, Alper, 2023. "Multi-plant manufacturing assortment planning in the presence of transshipments," European Journal of Operational Research, Elsevier, vol. 310(3), pages 1033-1050.
    4. Yu, Yugang & Wang, Bo & Zheng, Shengming, 2024. "Data-driven product design and assortment optimization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 182(C).
    5. Ma, Haicheng & Lou, Gaoxiang & Fan, Tijun & Chan, Hing Kai & Chung, Sai Ho, 2021. "Conventional automotive supply chains under China's dual-credit policy: fuel economy, production and coordination," Energy Policy, Elsevier, vol. 151(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xue Bai & Sudip Bhattacharjee & Fidan Boylu & Ram Gopal, 2015. "Growth Projections and Assortment Planning of Commodity Products Across Multiple Stores: A Data Mining and Optimization Approach," INFORMS Journal on Computing, INFORMS, vol. 27(4), pages 619-635, November.
    2. A. Gürhan Kök & Yi Xu, 2011. "Optimal and Competitive Assortments with Endogenous Pricing Under Hierarchical Consumer Choice Models," Management Science, INFORMS, vol. 57(9), pages 1546-1563, February.
    3. Fernando Bernstein & A. Gürhan Kök & Lei Xie, 2015. "Dynamic Assortment Customization with Limited Inventories," Manufacturing & Service Operations Management, INFORMS, vol. 17(4), pages 538-553, October.
    4. Joonkyum Lee & Vishal Gaur & Suresh Muthulingam & Gary F. Swisher, 2016. "Stockout-Based Substitution and Inventory Planning in Textbook Retailing," Manufacturing & Service Operations Management, INFORMS, vol. 18(1), pages 104-121, February.
    5. Palsule-Desai, Omkar D. & Tirupati, Devanath & Shah, Janat, 2015. "Product line design and positioning using add-on services," International Journal of Production Economics, Elsevier, vol. 163(C), pages 16-33.
    6. Hongmin Li & Scott Webster & Gwangjae Yu, 2020. "Product Design Under Multinomial Logit Choices: Optimization of Quality and Prices in an Evolving Product Line," Manufacturing & Service Operations Management, INFORMS, vol. 22(5), pages 1011-1025, September.
    7. Jalali, Hamed & Van den Broeke, Maud & Van Nieuwenhuyse, Inneke, 2022. "Platform and product design for markets with quality and feature sensitive customers," International Journal of Production Economics, Elsevier, vol. 244(C).
    8. Fernando Bernstein & A. Gürhan Kök & Lei Xie, 2011. "The Role of Component Commonality in Product Assortment Decisions," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 261-270, August.
    9. Yücel, Eda & Karaesmen, Fikri & Salman, F. Sibel & Türkay, Metin, 2009. "Optimizing product assortment under customer-driven demand substitution," European Journal of Operational Research, Elsevier, vol. 199(3), pages 759-768, December.
    10. Maria Mayorga & Hyun-Soo Ahn & Goker Aydin, 2013. "Assortment and inventory decisions with multiple quality levels," Annals of Operations Research, Springer, vol. 211(1), pages 301-331, December.
    11. Pol Boada-Collado & Victor Martínez-de-Albéniz, 2020. "Estimating and Optimizing the Impact of Inventory on Consumer Choices in a Fashion Retail Setting," Manufacturing & Service Operations Management, INFORMS, vol. 22(3), pages 582-597, May.
    12. Felipe Caro & Victor Martínez-de-Albéniz & Paat Rusmevichientong, 2014. "The Assortment Packing Problem: Multiperiod Assortment Planning for Short-Lived Products," Management Science, INFORMS, vol. 60(11), pages 2701-2721, November.
    13. Transchel, Sandra, 2017. "Inventory management under price-based and stockout-based substitution," European Journal of Operational Research, Elsevier, vol. 262(3), pages 996-1008.
    14. Ding, Xiaohui & Chen, Caihua & Li, Chongshou & Lim, Andrew, 2021. "Product demand estimation for vending machines using video surveillance data: A group-lasso method," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    15. Serguei Netessine & Terry A. Taylor, 2007. "Product Line Design and Production Technology," Marketing Science, INFORMS, vol. 26(1), pages 101-117, 01-02.
    16. Dorothée Honhon & Vishal Gaur & Sridhar Seshadri, 2010. "Assortment Planning and Inventory Decisions Under Stockout-Based Substitution," Operations Research, INFORMS, vol. 58(5), pages 1364-1379, October.
    17. Tang, Christopher S., 2010. "A review of marketing-operations interface models: From co-existence to coordination and collaboration," International Journal of Production Economics, Elsevier, vol. 125(1), pages 22-40, May.
    18. Maher Agi & Xinghao Yan, 2020. "Greening products in a supply chain under market segmentation and different channel power structures," Post-Print hal-02898158, HAL.
    19. Qiu, Jiaqing & Li, Xiangyong & Duan, Yongrui & Chen, Mengxi & Tian, Peng, 2020. "Dynamic assortment in the presence of brand heterogeneity," Journal of Retailing and Consumer Services, Elsevier, vol. 56(C).
    20. Tang, Christopher S. & Yin, Rui, 2010. "The implications of costs, capacity, and competition on product line selection," European Journal of Operational Research, Elsevier, vol. 200(2), pages 439-450, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:269:y:2018:i:1:p:272-285. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.