The Optimal Decision-making For Two-stage Programming Of Multi-product Under Postponement Strategy

In the current market, with the proliferation of product categories and accelerationof product changing speed, the customer demand appears the characteristics of largefluctuation, diversity and individuality. Manufacturing operations are facing with manypressures of increasing small lots ratio, shortening delivery time, improving productquality, reducing costs and improving the service. So how to match the limited productsupply capacity and the uncertain demand better is an urgent problem. Usually, theflexible business and marketing modes are applied to adjust the product supply anddemand volatility, such as postponed production and postponed pricing. Postponedpricing develop the product sales price only after the accurate information on marketdemand is available, by doing this, the inconsistency of supply and demand can bereduced. Postponed production can regulate the production effectively to resist theuncertain market demand by delaying the customized production process until theaccurate order information is received.Firstly, the literatures on postponed production and postponed pricing are reviewedso as to pinpoint the importance of research of postponed production and postponedpricing in production decision, and at the same time, the two-stage programming modelcan be applied to solve the multi-product production problem.Secondly, the two-stage programming model of multi-product under independentdemand is set. When the unit of postponed production cost does not exceed a certainthreshold, postponed production will be effective, by comparing the Kuhn-Tuckercondition under non-postponement production and postponed production. And then, thefactors influencing the optimal production quantity and profit are analyzed, such asmarket size, the slope of demand curve, and so on.Thirdly, the two-stage programming model of multi-product is set respectivelywhen the market sizes are positively or negatively related. When the market sizes arepositively related, whether to adopt the postponed production depend on the maximumpricing threshold and production cost. When the market sizes are negatively related,whether to adopt the postponed production depend on the total market demand. Besides,the substitution of generic products is analyzed in each condition.Finally, the two-stage programming model of multi-product is set undernon-postponement production and postponed production based on the demand substitution and linear demand function. By analyzing the model, the factors influencingthe production quantity and profit are found out, such as postponed production cost,substitution degree, the uncertain degree of market and the related degree of marketsize.