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Integration of promotion and production decisions in sales and operations planning

Author

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  • Agus Darmawan
  • Hartanto Wong
  • Anders Thorstenson

Abstract

This paper presents a new modelling framework for developing a sales and operations plan that integrates promotion and production planning decisions. We adopt a rich demand function that captures the dynamics and heterogeneity of consumer response to price promotions by simulating purchase incidence, consumer choice and quantity decisions, as well as household’s inventory level. Our numerical study reveals interesting findings on the benefits of developing an integrated sales and operations plan as well as the optimal timing and number of promotions, and more importantly, how these findings are influenced by the mutual dependence of marketing- and production-related factors.

Suggested Citation

  • Agus Darmawan & Hartanto Wong & Anders Thorstenson, 2018. "Integration of promotion and production decisions in sales and operations planning," International Journal of Production Research, Taylor & Francis Journals, vol. 56(12), pages 4186-4206, June.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:12:p:4186-4206
    DOI: 10.1080/00207543.2018.1431418
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    Cited by:

    1. Jackson, Ilya & Ivanov, Dmitry, 2023. "A beautiful shock? Exploring the impact of pandemic shocks on the accuracy of AI forecasting in the beauty care industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    2. J. F. F. Almeida & S. V. Conceição & L. R. Pinto & B. R. P. Oliveira & L. F. Rodrigues, 2022. "Optimal sales and operations planning for integrated steel industries," Annals of Operations Research, Springer, vol. 315(2), pages 773-790, August.
    3. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2022. "Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach," Omega, Elsevier, vol. 107(C).
    4. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2020. "Tactical sales and operations planning: A holistic framework and a literature review of decision-making models," International Journal of Production Economics, Elsevier, vol. 228(C).
    5. Diego Aparecido Wolfshorndl & Mauro Vivaldini & João Batista Camargo Junior, 2020. "Advanced Planning System as support for Sales and Operation Planning: study in a Brazilian automaker," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 21(1), pages 1-13, June.

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