IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v243y2015i1p109-119.html
   My bibliography  Save this article

A delayed product customization cost model with supplier delivery performance

Author

Listed:
  • Ngniatedema, Thomas
  • Fono, Louis Aimé
  • Mbondo, Georges Dieudonné

Abstract

The concept of delayed product differentiation has received considerable attention in the research literature in recent years. However, few analytical models explain and quantify the benefits of delayed product differentiation strategy with additional consideration of supplier delivery performance. This paper proposes a delayed product differentiation model in which a supply of raw materials is integrated at the beginning of the production process to match uncertain demand in a cost-effective way given the constraint of lead time delivery window. It develops insights regarding a delayed product differentiation strategy and shows that with respect to delivery windows, supplier delivery performance plays an important role in the determination of the optimal point of differentiation. This study also shows that when the “on-time” and the “late” portions of the delivery window are constant, the proposed cost function coincides with similar models found in the literature. An extension of this work also reveals that when the customer service level varies across various production stages, its choice affects the decision to delay or postpone the customization point. A mini industrial case involving the customization of a personal desktop computer is used to illustrate the applicability of the resulting framework.

Suggested Citation

  • Ngniatedema, Thomas & Fono, Louis Aimé & Mbondo, Georges Dieudonné, 2015. "A delayed product customization cost model with supplier delivery performance," European Journal of Operational Research, Elsevier, vol. 243(1), pages 109-119.
    • Handle: RePEc:eee:ejores:v:243:y:2015:i:1:p:109-119
    DOI: 10.1016/j.ejor.2014.11.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221714009217
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2014.11.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bushuev, Maxim A. & Guiffrida, Alfred L., 2012. "Optimal position of supply chain delivery window: Concepts and general conditions," International Journal of Production Economics, Elsevier, vol. 137(2), pages 226-234.
    2. Hau L. Lee & Christopher S. Tang, 1998. "Variability Reduction Through Operations Reversal," Management Science, INFORMS, vol. 44(2), pages 162-172, February.
    3. Daniel Granot & Shuya Yin, 2008. "Price and Order Postponement in a Decentralized Newsvendor Model with Multiplicative and Price-Dependent Demand," Operations Research, INFORMS, vol. 56(1), pages 121-139, February.
    4. Guiffrida, Alfred L. & Nagi, Rakesh, 2006. "Cost characterizations of supply chain delivery performance," International Journal of Production Economics, Elsevier, vol. 102(1), pages 22-36, July.
    5. Krishnan S. Anand & Karan Girotra, 2007. "The Strategic Perils of Delayed Differentiation," Management Science, INFORMS, vol. 53(5), pages 697-712, May.
    6. Ma, Shihua & Wang, Wei & Liu, Liming, 2002. "Commonality and postponement in multistage assembly systems," European Journal of Operational Research, Elsevier, vol. 142(3), pages 523-538, November.
    7. Yossi Aviv & Awi Federgruen, 2001. "Design for Postponement: A Comprehensive Characterization of Its Benefits Under Unknown Demand Distributions," Operations Research, INFORMS, vol. 49(4), pages 578-598, August.
    8. Reimann, Marc, 2012. "Accurate response by postponement," European Journal of Operational Research, Elsevier, vol. 220(3), pages 619-628.
    9. Ernst, Ricardo & Kamrad, Bardia, 2000. "Evaluation of supply chain structures through modularization and postponement," European Journal of Operational Research, Elsevier, vol. 124(3), pages 495-510, August.
    10. Hau L. Lee, 1996. "Effective Inventory and Service Management Through Product and Process Redesign," Operations Research, INFORMS, vol. 44(1), pages 151-159, February.
    11. Jewkes, Elizabeth M. & Alfa, Attahiru S., 2009. "A queueing model of delayed product differentiation," European Journal of Operational Research, Elsevier, vol. 199(3), pages 734-743, December.
    12. Hau L. Lee & Christopher S. Tang, 1997. "Modelling the Costs and Benefits of Delayed Product Differentiation," Management Science, INFORMS, vol. 43(1), pages 40-53, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ngniatedema, Thomas & Shanker, Murali & Hu, Michael Y. & Guiffrida, Alfred L. & Eddy Patuwo, B., 2015. "Late customization strategy with service levels requirements," International Journal of Production Economics, Elsevier, vol. 166(C), pages 72-84.
    2. Yilun Zhang & Jianghang Chen & Zhibin Jiang, 2023. "Optimal product service system configuration considering pairing utility and uncertain customer behavior," Flexible Services and Manufacturing Journal, Springer, vol. 35(2), pages 343-375, June.
    3. Singa Wang Chiu & Liang-Wei You & Tsu-Ming Yeh & Tiffany Chiu, 2020. "The Collective Influence of Component Commonality, Adjustable-Rate, Postponement, and Rework on Multi-Item Manufacturing Decision," Mathematics, MDPI, vol. 8(9), pages 1-18, September.
    4. Tao, Liangyan & Liu, Sifeng & Xie, Naiming & Javed, Saad Ahmed, 2021. "Optimal position of supply chain delivery window with risk-averse suppliers: A CVaR optimization approach," International Journal of Production Economics, Elsevier, vol. 232(C).
    5. Wu, Jun & Du, Gang & Jiao, Roger J., 2021. "Optimal postponement contracting decisions in crowdsourced manufacturing: A three-level game-theoretic model for product family architecting considering subcontracting," European Journal of Operational Research, Elsevier, vol. 291(2), pages 722-737.
    6. Heradio, Ruben & Perez-Morago, Hector & Alférez, Mauricio & Fernandez-Amoros, David & Alférez, Germán H., 2016. "Augmenting measure sensitivity to detect essential, dispensable and highly incompatible features in mass customization," European Journal of Operational Research, Elsevier, vol. 248(3), pages 1066-1077.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiri Chod & David Pyke & Nils Rudi, 2010. "The Value of Flexibility in Make-to-Order Systems: The Effect of Demand Correlation," Operations Research, INFORMS, vol. 58(4-part-1), pages 834-848, August.
    2. Xiong, Yixuan & Du, Gang & Jiao, Roger J., 2018. "Modular product platforming with supply chain postponement decisions by leader-follower interactive optimization," International Journal of Production Economics, Elsevier, vol. 205(C), pages 272-286.
    3. Ngniatedema, Thomas & Shanker, Murali & Hu, Michael Y. & Guiffrida, Alfred L. & Eddy Patuwo, B., 2015. "Late customization strategy with service levels requirements," International Journal of Production Economics, Elsevier, vol. 166(C), pages 72-84.
    4. Reimann, Marc, 2012. "Accurate response by postponement," European Journal of Operational Research, Elsevier, vol. 220(3), pages 619-628.
    5. Wu, Jun & Du, Gang & Jiao, Roger J., 2021. "Optimal postponement contracting decisions in crowdsourced manufacturing: A three-level game-theoretic model for product family architecting considering subcontracting," European Journal of Operational Research, Elsevier, vol. 291(2), pages 722-737.
    6. Işık Biçer & Florian Lücker & Tamer Boyacı, 2022. "Beyond Retail Stores: Managing Product Proliferation along the Supply Chain," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1135-1156, March.
    7. Li, Jian & Edwin Cheng, T.C. & Wang, Shouyang, 2007. "Analysis of postponement strategy for perishable items by EOQ-based models," International Journal of Production Economics, Elsevier, vol. 107(1), pages 31-38, May.
    8. Jewkes, Elizabeth M. & Alfa, Attahiru S., 2009. "A queueing model of delayed product differentiation," European Journal of Operational Research, Elsevier, vol. 199(3), pages 734-743, December.
    9. MdAfzalul Aftab & Qin Yuanjian & Nadia Kabir, 2017. "Postponement Application in the Fast Fashion Supply Chain: A Review," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(7), pages 115-115, June.
    10. Daniel Granot & Shuya Yin, 2008. "Price and Order Postponement in a Decentralized Newsvendor Model with Multiplicative and Price-Dependent Demand," Operations Research, INFORMS, vol. 56(1), pages 121-139, February.
    11. Graman, Gregory A., 2010. "A partial-postponement decision cost model," European Journal of Operational Research, Elsevier, vol. 201(1), pages 34-44, February.
    12. Tang, Christopher S., 2006. "Perspectives in supply chain risk management," International Journal of Production Economics, Elsevier, vol. 103(2), pages 451-488, October.
    13. Patrick Afflerbach & Manuel Bolsinger & Maximilian Röglinger, 2016. "An economic decision model for determining the appropriate level of business process standardization," Business Research, Springer;German Academic Association for Business Research, vol. 9(2), pages 335-375, August.
    14. Gilbert, Stephen M. & Cvsa, Viswanath, 2003. "Strategic commitment to price to stimulate downstream innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 150(3), pages 617-639, November.
    15. Li, Jian & Wang, Shouyang & Cheng, T.C. Edwin, 2008. "Analysis of postponement strategy by EPQ-based models with planned backorders," Omega, Elsevier, vol. 36(5), pages 777-788, October.
    16. Weskamp, Christoph & Koberstein, Achim & Schwartz, Frank & Suhl, Leena & Voß, Stefan, 2019. "A two-stage stochastic programming approach for identifying optimal postponement strategies in supply chains with uncertain demand," Omega, Elsevier, vol. 83(C), pages 123-138.
    17. Kyle Cattani & Geraldo Ferrer & Wendell Gilland, 2003. "Simultaneous production of market‐specific and global products: A two‐stage stochastic program with additional demand after recourse," Naval Research Logistics (NRL), John Wiley & Sons, vol. 50(5), pages 438-461, August.
    18. S Kumar & D A Nottestad & E E Murphy, 2009. "Effects of product postponement on the distribution network: a case study," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(4), pages 471-480, April.
    19. Song, Zhe & Kusiak, Andrew, 2010. "Mining Pareto-optimal modules for delayed product differentiation," European Journal of Operational Research, Elsevier, vol. 201(1), pages 123-128, February.
    20. Li Chen & Yao Cui & Hau L. Lee, 2021. "Retailing with 3D Printing," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 1986-2007, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:243:y:2015:i:1:p:109-119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.