SC&L SEMINAR SERIES :: Realizing Market Segmentation in the Manufacturing Industry

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We analyze market segmentation in manufacturing where customers are differentiated according to fulfillment priority and willingness to wait. We allow some orders to be promised immediately and satisfied in the next period (B), and inventory may be reserved to satisfy future profitable demand (R). We show a modified order-up-to policy (S, R, B) is optimal for various rationing strategies where S is the base stock level and values are limited by capacity; profit improvement can be significant.


  • Workflow Status: Published
  • Created By: Barbara Christopher
  • Created: 10/08/2010
  • Modified By: Fletcher Moore
  • Modified: 10/07/2016


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