Product Variety and Demand Uncertainty

Product Variety and Demand Uncertainty
Author: Dennis W. Carlton
Publisher:
Total Pages: 38
Release: 2004
Genre: Product lines
ISBN:

Download Product Variety and Demand Uncertainty Book in PDF, Epub and Kindle

We show that demand uncertainty leads to vertical product differentiation even when consumers are homogeneous. When a firm anticipates that its inventory or capacity may not be fully utilized, product variety can reduce its expected costs of excess capacity. When the firm offers a continuum of product varieties, the highest quality product has the highest profit margins but the lowest percentage margin, while the lowest quality product has the highest percentage margin but the lowest absolute margin. We derive these results in both a monopoly model and a variety of different competitive models. We conclude with a discussion of empirical predictions together with a brief discussion of supporting evidence available from marketing studies.

Product Variety and Demand Uncertainty

Product Variety and Demand Uncertainty
Author: Dennis W. Carlton
Publisher:
Total Pages: 0
Release: 2008
Genre:
ISBN:

Download Product Variety and Demand Uncertainty Book in PDF, Epub and Kindle

We demonstrate that demand uncertainty can explain equilibrium product variety in the presence of sunk costs. Product variety is an efficient response to uncertainty because it reduces the expected costs associated with excess capacity. We find that within the firm's product line, the highest quality product has the highest profit margin but the lowest percentage margin, while the lowest quality product has the highest percentage margin but the lowest absolute margin. Both of these relationships are consistent with evidence available from marketing studies.

Product Variety Management

Product Variety Management
Author: Teck-Hua Ho
Publisher: Springer Science & Business Media
Total Pages: 247
Release: 2012-12-06
Genre: Business & Economics
ISBN: 1461555795

Download Product Variety Management Book in PDF, Epub and Kindle

Product proliferation has become a common phenomenon. Most companies now offer hundreds, if not thousands, of stock keeping units (SKUs) in order to compete in the market place. Companies with expanding product and service varieties face with problems of obtaining accurate demand forecasts, controlling production and inventory costs, and providing high quality and good delivery performance for the customers. Marketing managers often advocate widening product lines for increasing revenue and market share. However, the breadth of product line can also decrease the efficiency of manufacturing processes and distribution systems. Thus firms must weigh the benefits of product variety against its cost in order to determine the optimal level of product variety to offer to their customers. Academics and practitioners are interested in several fundamental questions about product variety. For instance, why do companies extend their product lines? Do consumers care about product variety? Will a brand with more variety enjoy higher market share? How should product variety be measured? How can a company exploit its product and process design to deliver a higher level of product variety quickly and cheaply? What should the level of product variety be and what should the price of each of the product variants be? What kind of 'challenges would a company face in offering a high level of product variety and how can these obstacles be overcome? The solutions to these questions span multiple functions and disciplines.

Demand for Variety and Product Uncertainty

Demand for Variety and Product Uncertainty
Author: William Allender
Publisher:
Total Pages: 0
Release: 2015
Genre:
ISBN:

Download Demand for Variety and Product Uncertainty Book in PDF, Epub and Kindle

Many consumer demand situations exist in which individuals have a preference for variety that leads to multiple products being chosen. For example, clothing, food, books, and music are regularly purchased several items at a time. Prior to a purchase decision consumers face product uncertainty that is resolved through a costly search process that is implicitly affected by their demand for variety. Despite the prevalence of both product uncertainty and a preference for variety both topics are often studied in isolation from each other. In this paper we propose a general demand framework of endogenous consideration set formation in the presence of variety seeking behavior that accommodates a mixture of corner and interior solutions. Using a closed form expression of the model we analyze simulated data and a scanner-panel data set of laundry detergent purchases and find that ignoring either variety or uncertainty leads to biased parameter estimates and inaccurate consideration set size predictions. Using the laundry detergent results we simulate the elasticity of search and find some brands can significantly increase the likelihood of being searched with minor price reductions, while other brands require significantly more effort.

The Territorial Organization of Variety

The Territorial Organization of Variety
Author: Jerry Patchell
Publisher: Routledge
Total Pages: 214
Release: 2016-03-03
Genre: Business & Economics
ISBN: 1317014359

Download The Territorial Organization of Variety Book in PDF, Epub and Kindle

The wine industry appears to be an anomaly within the modern global economy. Thousands of small companies provide a vast variety of highly differentiated products and compete successfully with multinational corporations. Using case studies from Bordeaux, Napa Valley and Chianti Classico, this book argues that rather than being a vestige or a serendipitous phenomenon, this variety results from a sophisticated alternative organization of production. Integrating differentiation and branding into Ostrom's common pool resource theory, Jerry Patchell shows how winegrowers in a territory can use self-governance to protect and promote their common reputation while enhancing each producer's ability to differentiate their wines and build their own brand. Bordeaux, Napa, and Chianti Classico share several common challenges, but develop a set of strategies and tools appropriate to their markets and regulatory contexts.

A Stitch in Time

A Stitch in Time
Author: Frederick H. Abernathy
Publisher: Oxford University Press
Total Pages: 384
Release: 1999-07-29
Genre: Business & Economics
ISBN: 0190284358

Download A Stitch in Time Book in PDF, Epub and Kindle

The apparel and textile industries have always been at the mercy of rapidly changing styles and fickle customers who want the latest designs while they are still in fashion. The result for these businesses, often forced to forecast sales and order from suppliers with scant information about volatile demand, is a history of stock shortages, high inventories, and costly markdowns. But, as the authors explain in A Stitch in Time, technological advances in the 1980s paved the way for a new concept in retailing--lean retailing. Pioneered by companies like WAL-MART, lean retailing has reshaped the way that products are ordered, virtually eliminating delays from distribution center to sales rack by drawing on sales data captured electronically at the checkout counter. Armed with up-to-the-minute data about colors, sizes, styles, and geographic sales, apparel and textile companies now must be able to respond rapidly to real-time orders efficiently based on new approaches to distributing merchandise, forecasting, planning, organizing production, and managing supplier relations. A Stitch in Time shows that even in the face of burgeoning product proliferation, companies that successfully adapt to the world of lean retailing can reduce inventory risk, reduce costs, and increase profitability while improving their responsiveness to the ever-changing tastes of customers. Based on the success of these practices in the apparel industry, lean retailing practices are propagating through a growing number of consumer product industries. A richly detailed and resonant account, A Stitch in Time brilliantly captures both the history and future of the retail-apparel-textile channel and offers bold insights on the changes and challenges facing retailers and manufacturers in all segments of our rapidly changing economy.

Production Management

Production Management
Author: Yacob Khojasteh
Publisher: CRC Press
Total Pages: 197
Release: 2017-11-07
Genre: Business & Economics
ISBN: 1315394367

Download Production Management Book in PDF, Epub and Kindle

Inventory control is an essential task in production management. An effective inventory control can significantly reduce the holding cost and hence, total production cost. Selecting and implementing a suitable production control system plays an important role in inventory reduction and performance improvement of a production system. Since the introduction of Toyota’s just-in-time philosophy, pull control systems have been adopted by numerous companies worldwide, both in the manufacturing and service sectors. This book provides some recent developments in production management and presents modeling and analysis tools for pull production control systems. It contributes by combining theoretical findings and case study analysis results with a practical and contemporary view on how to effectively manage and control production systems. Each chapter in this book focuses on a specific topic in production control systems, allowing readers to identify the chapters that relate to their interests. More specifically, the book is presented in three sections. The first section focuses on the design and implementation aspects of the pull production control systems, as well as performance evaluation approaches for pull systems. The second section presents a recent and comprehensive literature review. Three different case studies on implementation of pull production control systems are presented in the last section. This book can be used as an essential source for students and scholars who need to specifically study the pull control systems. Since the superiority of these systems is controversial, the book can also provide an interesting and informative read for practitioners, managers, and employees who need to deepen their knowledge on pull production management systems.

Dispersed Manufacturing Networks

Dispersed Manufacturing Networks
Author: Rob Dekkers
Publisher: Springer Science & Business Media
Total Pages: 255
Release: 2009-06-26
Genre: Technology & Engineering
ISBN: 1848824688

Download Dispersed Manufacturing Networks Book in PDF, Epub and Kindle

Dispersed Manufacturing Networks provides new perspectives of dispersed manufacturing systems from three points of view. The first is that offered by complex systems theory, particularly on how agents in these industrial networks interact and how that provides possibility for coordination. The book also elaborates on issues of coordination and planning, as well as examining new solutions and challenges for logistics problems and collaboration in engineering networks within the internationalisation perspective. The impact of globalization is discussed for both managerial decision-making and operational performance of supply chains. A strong emphasis is placed on the need for continuous decision-making with recognition of the fact that networks of loosely connected agents require different approaches. Both researchers and professionals will welcome Dispersed Manufacturing Networks. It is an informative guide for those researching and working across a range of fields.

Variety Induced Complexity in Mass Customization

Variety Induced Complexity in Mass Customization
Author: Nizar Abdelkafi
Publisher: Erich Schmidt Verlag GmbH & Co KG
Total Pages: 340
Release: 2008
Genre: Business logistics
ISBN: 9783503110223

Download Variety Induced Complexity in Mass Customization Book in PDF, Epub and Kindle