Strict-product-ordering approach in the vertical product-line design problem.: An article from: IIE Transactions
Book Details
Author(s)Dilip Chhajed, Kilsun Kim
ISBN / ASINB000ALOGHM
ISBN-13978B000ALOGH2
AvailabilityAvailable for download now
MarketplaceUnited States 🇺🇸
Description
This digital document is an article from IIE Transactions, published by Institute of Industrial Engineers, Inc. (IIE) on April 1, 2005. The length of the article is 12729 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
From the author: We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are designed with quality-type attributes and customer segments exhibit an ordered pattern in the attribute part-worth structure. In this paper, we examine the appropriateness of a strict-product-ordering approach across products in designing a vertical product line. We show that the approach, although used widely in practice, is not a property of an optimal solution and can lead to an arbitrarily bad design. Furthermore, we present a sufficient condition where the strict-product-ordering approach is the property of an optimal solution in a general product line design problem. We also show that the VPD problem with a strict-product-ordering approach is computationally intractable, and develop a greedy heuristic solution procedure that exploits the problem structure. A computational study shows that the heuristic results in an average performance ratio of 98.7% compared with optimal solutions. In addition, our computational study shows that insisting on the strict-product-ordering approach results in on-average 3% less profit for the firm if it is enforced in inappropriate conditions.
Citation Details
Title: Strict-product-ordering approach in the vertical product-line design problem.
Author: Dilip Chhajed
Publication:IIE Transactions (Refereed)
Date: April 1, 2005
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: 37 Issue: 4 Page: 319(13)
Distributed by Thomson Gale
From the author: We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are designed with quality-type attributes and customer segments exhibit an ordered pattern in the attribute part-worth structure. In this paper, we examine the appropriateness of a strict-product-ordering approach across products in designing a vertical product line. We show that the approach, although used widely in practice, is not a property of an optimal solution and can lead to an arbitrarily bad design. Furthermore, we present a sufficient condition where the strict-product-ordering approach is the property of an optimal solution in a general product line design problem. We also show that the VPD problem with a strict-product-ordering approach is computationally intractable, and develop a greedy heuristic solution procedure that exploits the problem structure. A computational study shows that the heuristic results in an average performance ratio of 98.7% compared with optimal solutions. In addition, our computational study shows that insisting on the strict-product-ordering approach results in on-average 3% less profit for the firm if it is enforced in inappropriate conditions.
Citation Details
Title: Strict-product-ordering approach in the vertical product-line design problem.
Author: Dilip Chhajed
Publication:IIE Transactions (Refereed)
Date: April 1, 2005
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: 37 Issue: 4 Page: 319(13)
Distributed by Thomson Gale
