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Product mix variability with correlated demand in two-stage food manufacturing with intermediate storage

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  • Akkerman, Renzo
  • van Donk, Dirk Pieter

Abstract

In food processing, market demands are increasingly important, resulting in regular introductions of new products, or special offers. Often, such an introduction or promotional effort affects demand of other products or packaging types. Here we study the effect of such correlated demand. More specifically, the aim of this paper is to study the effect of product mix variability and correlated demand in a two-stage food production system. Results from a simulation study show that increasing correlation on the product level results in an increase in average lead times. A slightly smaller effect is seen for correlation on the package level. Similar results are found for average waste. Increased variability amplifies these effects.

Suggested Citation

  • Akkerman, Renzo & van Donk, Dirk Pieter, 2009. "Product mix variability with correlated demand in two-stage food manufacturing with intermediate storage," International Journal of Production Economics, Elsevier, vol. 121(2), pages 313-322, October.
    • Handle: RePEc:eee:proeco:v:121:y:2009:i:2:p:313-322
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    References listed on IDEAS

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    Cited by:

    1. Tomasz Brzęczek, 2020. "Optimisation of product portfolio sales and their risk subject to product width and diversity," Review of Managerial Science, Springer, vol. 14(5), pages 1009-1027, October.
    2. Khouja, Moutaz & Zhou, Jing, 2017. "An off-price retailer with two ordering opportunities and demand updating," International Journal of Production Economics, Elsevier, vol. 188(C), pages 128-138.
    3. Nielsen Peter & Do Ngoc Anh Dung & Eriksen Thomas & Nielsen Izabela, 2014. "Towards an Analysis Methodology for Identifying Root Causes of Poor Delivery Performance," Foundations of Management, Sciendo, vol. 6(2), pages 31-42, December.
    4. Altay, Nezih & Litteral, Lewis A. & Rudisill, Frank, 2012. "Effects of correlation on intermittent demand forecasting and stock control," International Journal of Production Economics, Elsevier, vol. 135(1), pages 275-283.

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