A component procurement planning and product portfolio design problem

We study a multi-period component procurement-planning and product portfolio design problem with product substitutions and multiple customer segments. Each customer segment has a preferred product with a set of acceptable substitutes. Each product has a fixed design cost and profit margin, both of which are time-period-dependent. Moreover, each product is assembled-to-order from a set of components, and inventory is held at the component level. Our aim is to determine a product portfolio, substitution plan, and procurement plan that maximizes profit. We develop a large-scale mixed-integer linear programming formulation, show that the problem is N P-Hard and provide preliminary computational results.

A component procurement planning and product portfolio design problem Conference Paper