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Packaged gas supply chain planning with network-wide SKU rationalization

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  • Malinowski, Ethan
  • Karwan, Mark H.
  • Sun, Lei
  • Pinto, José M.

Abstract

Effective SKU rationalization is advantageous when applied to businesses with a high variety of product offerings. Advantages may include lower production costs, inventory simplifications, and system-wide reductions in transportation costs. We apply SKU rationalization in the form of a variant of product substitution, towards an industrial packaged gas supply chain problem which includes production, allocation, and distribution decisions. An effective mixed-integer programming formulation is developed, capable of handling additional line investment, varying degrees of substitution, economies-of-scale in production, as well as network-wide planning decisions in the supply chain. A case study based on historical data is used for testing, followed by computational results and policy implications in the form of customer incentivization.

Suggested Citation

  • Malinowski, Ethan & Karwan, Mark H. & Sun, Lei & Pinto, José M., 2018. "Packaged gas supply chain planning with network-wide SKU rationalization," International Journal of Production Economics, Elsevier, vol. 204(C), pages 346-357.
    • Handle: RePEc:eee:proeco:v:204:y:2018:i:c:p:346-357
    DOI: 10.1016/j.ijpe.2018.08.013
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    References listed on IDEAS

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    Cited by:

    1. Malinowski, Ethan & Karwan, Mark H. & Sun, Lei, 2021. "Customer selection and incentivization for SKU rationalization in a packaged gas supply chain," International Journal of Production Economics, Elsevier, vol. 234(C).

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