Product-Mix Allocation

Abstract

Enforced by continuously expanding production structures and production programs, original equipment manufacturers have faced an increasing complexity when dealing with product allocation decisions in recent years. Fluctuations in demand and other key components of the production network require adaptable and well-structured production mechanisms to maintain and enhance global competitiveness. Questions of where and when to produce certain products have risen in priority, especially in the context of globally operating production networks, due to extended factor costs and global market dynamics. Therefore, it is essential for manufacturers to further optimize and reconfigure their production networks as historically grown networks or isolated allocation decisions have led to efficiency losses. The problems of product allocation and network configuration are highly interdependent and hence need to be taken into account in an integrated manner when making decisions. Therefore, this chapter proposes several approaches that particularly focus on product allocation decisions, whereas some integrated approaches also regard configurational aspects.