Optimal Product Line Research Articles

Research on production process optimization of precast concrete component factory based on value stream mapping

Purpose The purpose of this paper is to investigate the process optimization of a precast concrete component production line by using value stream mapping. Design/methodology/approach This paper is an empirical focused on of lean production theory and value stream mapping. The data in the case study were collected in real time on-site for each process during the production process of a prefabricated exterior wall. Findings The results of the current value stream map indicate that the main problems of the current production process are related to equipment, technology and organization. The equipment problems include simple demolding and cleaning tools and the lack of professional transfer channels. The technology problems include the lack of a marking mechanism and pipeline exit mechanism. There is a lack of standard operating procedures and incomplete process convergence. A comparison and analysis of the current value stream and the future value flow indicate that optimizations of the process flow, the production line layout, and the standard operating procedures have shortened the delivery cycle, reduced the number of workers, improved the operator’s operating level and balanced the production line. Practical implications The results of this study provide practitioners with a clear understanding of the optimization of the precast concrete component production and represent a method and basis for the process optimization of a factory production line; the approach is suitable for process optimization in other areas. Originality/value This research represents an innovative application of lean production theory and value stream mapping in a complex production line of precast concrete components and thereby fills the gap between the theory and practice of the optimization of a precast concrete component production line.

Product line design and quality differentiation for green and non-green products in a supply chain

Motivated by the real practices in the circular economy, this paper aims to identify optimal product line design for green and non-green products in terms of quality differentiation. We develop a price and quality driven consumer choice model in a two-echelon supply chain through using a game-theoretical approach. Our study shows that no matter how high or low the product quality difference is, when the consumers’ willingness to pay (WTP) for responsibility is relatively low, a single product line strategy will be prioritised over a two-product line strategy; whereas when the consumers’ WTP for responsibility is relatively high, a two-product line strategy is more desirable. Moreover, we find that enhancing product quality could increase consumer welfare and reduce environmental impact. Only when green and non-green product quality difference is large enough, designing and selling green products is beneficial to consumers, brings the slightest pressure on the environment, and generates the highest social welfare. Furthermore, we extend the model by introducing a simplified contract and find that a simplified contract is not able to increase the manufacturer's profit, but may increase the retailer's profit and consumer surplus as well as generate better performance in environmental protection and social welfare.

Balancing product differentiation and cost saving in the presence of consumer deliberation

AbstractThis paper investigates the manufacturer's optimal product line design under different production strategies when customers with different preference structures (dominating or nondominating) need to incur the deliberation cost to uncover customers' valuations of product quality. We characterize the optimal price, quality, and profit under different production strategies and preference structures. Our results demonstrate that the optimal product line under both production strategies is threshold‐controlled, and there exists a deliberation cost threshold, below which the manufacturer provides efficient quality for high‐valuation customers and distorts the quality of low‐end products, while above such a threshold, the manufacturer increases the quality dispersion between high‐end and low‐end products. We also find that the adoption of commonality will increase the manufacturer's profit only if the cost‐saving effect is relatively significant. Contrary to the existing literature, we finally reveal that commonality can reduce cannibalization in the nondominating preference structure scenario if the deliberation cost is low and the cost‐saving effect is strong or if the deliberation cost is sufficiently high.

Linking Product Line Strategies to Competitive Advantage

Purpose-This study examines the relationships between product line strategies and competitive advantage in Nigerian foods and beverages industry.
 Design/Methodology-Data were obtained from a sample of 278 employees choosing from 8 companies in the foods and beverages industry located in north-eastern Nigeria using a self-administered questionnaire. Pearson's correlation and Multiple regression were conducted in the data analysis.
 Findings-Findings of the research revealed that all four hypotheses were supported signifying that product line strategies have significant effects on the competitive advantage of foods and beverages companies in Nigeria.
 Practical Implications-The study combined the dimensions of product line strategies to determine optimal product line in the food and beverages industry. It provides the decision makers of food and beverages firms in Nigeria with a guide for determining the blend of product line strategies to adopt in order to gain competitive advantage. It also served as a guide to potential investors in the food and beverages industry to make an informed decision that can strategically improve the efficiency and effectiveness through its advocacy on reforming product line strategies.

Interoperability of the Time of Industry 4.0 and the Internet of Things

Industry 4.0 demands a dynamic optimization of production lines. They are formed by sets of heterogeneous devices that cooperate towards a shared goal. The Internet of Things can serve as a technology enabler for implementing such a vision. Nevertheless, the domain is struggling in finding a shared understanding of the concepts for describing a device. This aspect plays a fundamental role in enabling an “intelligent interoperability” among sensor and actuators that will constitute a dynamic Industry 4.0 production line. In this paper, we summarize the efforts of academics and practitioners toward describing devices in order to enable dynamic reconfiguration by machines or humans. We also propose a set of concepts for describing devices, and we analyze how present initiatives are covering these aspects.

Product Line Pricing under Marginal Moment Model with Network Effect

The complex network effect of the product exhibits has a significant impact on the product line optimization design. The multinomial logit (MNL) model which is used to simulate consumer choice behavior is applied in most of product line optimization problems. However, its assumptions, independence of irrelevant alternatives (IIA) and the same Gumbel distribution of random error terms, are usually difficult to be met in practice. The marginal moment model (MMM) can be used when the mean and variance of consumer’s utility error are known. The MMM not only has weak assumption conditions but also overcomes the IIA problem of MNL model. In this paper, we study the product pricing problem based on MMM with endogenous negative network effect. Firstly, we construct a variant of MMM considering network effect in product line optimization design. Secondly, we prove that the revenue function is concave in market share. We propose the solving methods of the model to obtain the optimal price, the corresponding market share, and the revenue under three different scenarios, i.e., developing single product, homogeneous products, and heterogeneous products. Finally, numerical experiments show that the proposed model can better simulate consumer choice behavior and potentially increase revenue.

Efficient Throughput Analysis of Production Lines Based on Modular Queues

Analyzing throughput is very important for the design, optimization, and management of production lines. In this paper, we present an efficient throughput analysis approach for production lines with merging, splitting, and recirculating topologies. In particular, we define a decomposition regulation based on queue modules for the decomposition of the various topologies, and we improve an iterative approximation method for calculating and iterating the queue module state probabilities until the throughput of the production line is obtained. To decrease the computation time and automate the calculation process of the queue module state probabilities, we build a queue module database that includes the solution equations of common queue module state probabilities. The numerical examples show that our approach calculates the throughput of production lines with merging, splitting, and recirculating topologies with high accuracy (≥90%) and efficiency (completed in ten min). Our contribution is an efficient throughput evaluation methodology that can be used to rapidly estimate the performance and the cost of production lines with various topologies in the conceptual design phase of production lines in the industry.

An attempt of optimization of zinc production line

The goal of the research is an attempt of optimization of the hydrometallurgy-based zinc production line, consisting of three stages: mixing of raw materials, oxidative roasting and leaching. The output product of one stage is an input to the next stage. Goal of mixing is preparation of zinc concentrates mix on the basis of zinc concentrates originated from different mines. The output semi-product of the next stage, the oxidative roasting process, is calcine, which is the input of the leaching. The result of the leaching is zinc sulfate solution and the goal of leaching is to carry out the maximum amount of zinc to solution. The preliminary step of any optimization is modeling of the analyzed processes. Modeling of considered three stages of zinc production line, based on the real industrial data of one of zinc production plants, was performed using different techniques. The elaborated models were the basis of the optimization for given objective functions of each of the production stages. The optimization methodology of multi-stage processes developed by the authors was applied. Obtained results of modeling and optimization are presented.

Strategic Product Line Choice under Asymmetric Demand Structure

We examine strategic product line choices of manufacturers in a stylised duopoly model where products have asymmetric and interdependent market conditions. We characterise the optimal product line decisions and show that manufacturers always prefer to have head-to-head competition (and never segment markets) when product line setup cost is small relative to profitability of the products. When setup costs are high, symmetric manufacturers may prefer to have asymmetric product lines or market segmentation. We show that high setup costs lead to the market segmentation outcome only if there is no significant market size difference and the level of product substitutability is moderate.

Simulation and optimization of industrial production lines

Abstract Simulation and optimization techniques are the pillars of for the Virtual Commissioning of modern digital factories. In particular, industrial production lines are complex systems formed by a set of machines that have several cross-dependencies (i. e., the production efficiency of a machine impact deeply performance figures of the others and affects the whole line productivity). The simulation and optimization of production lines is an integrated approach that allows finding efficiently optimized production parameters. This paper presents an example of application of the simulation to the virtual design and optimization of an industrial production line.

Gas-Turbines and the Competitiveness of Aviation Plants

The challenge for Russian gas-turbine manufacturers is to create an optimal product line—optimal in the sense that gas-turbine engines may be supplied not only to the aviation industry but to other prospective customers with limited finances. That approach will not only ensure the efficient use of available resources but also quickly bring up-to-date marine and stationary gas-turbine engines to the market. For gas-turbine manufacturers, expansion of the markets for their products will result in significant increase in competitiveness.

Optimization of Production Lines and Cross-sections of Fiberglass Rebar

The article substantiates the need of the construction industry in new lightweight and durable materials that ensure reduction in the cost of work and increase in the operational characteristics of the constructed facilities. These materials include fiberglass reinforcement which is an auxiliary bar made of heavy-duty glass fibers impregnated with a polymer adhesive composition and additionally entwined to create a ribbed surface and tight fit with fiberglass threads. This fitting has undeniable advantages in comparison with steel fittings. The polymer composite is resistant to corroding medium, does not corrode, does not conduct electricity, has high elastic properties, low thermal conductivity, increased tensile strength, etc. It is shown that the issues related to the improvement of technology and the form of a fiberglass rebar section are relevant for the construction industry. So, in particular, the presented developments will significantly reduce the consumption of adhesive composition for impregnating roving threads, reduce production costs by eliminating the loss of adhesive composition in impregnating vessels and pull-guide rollers, increasing the environmental friendliness of production and increasing the line productivity. In addition, it is possible to improve the strength characteristics by optimizing the cross-section and longitudinal cross-sections of the resulting fiberglass reinforcement. The presented changes in the design and technology of fiberglass reinforcement production can be realized as a separate independent module. It is easy to integrate into existing lines during repair work or routine maintenance of equipment.

Optimal depth and timing of price promotions in a vertically differentiated product line

When a monopoly consumer packaged goods seller contemplates a temporary price decrease to promote a particular product, the decision is complicated, due to the potential impacts on demand for its other products. Yet limited research details how a monopoly seller should promote its offerings of different quality. This article proposes a model in which consumers switch from a low- to a high-quality offering in the product line when the latter's price is temporarily reduced. According to this model, the price promotion offers consumers a chance to learn about the high-end option, and some trials will lead to sufficient liking of the high-quality offering that they will continue purchasing it, even after it reverts to its regular (non-promotional) price. However, the quality expectations of these repeat buyers increase, which narrows the positive disconfirmation gap. Eventually, these consumers return to the low-quality option. With these assumptions, the current study determines a dynamically optimal (profit-maximizing) product line pricing and promotion strategy for a seller, which in turn has implications for consumer surplus. Contrary to conventional wisdom, overall consumer surplus decreases over the optimal price promotion cycle. A model extension also investigates a periodical promotion strategy for low-end products, in an effort to induce non-buyers to consume; the seller's profit also improves with this strategy.

Store Brand Quality and Retailer’s Product Line Design

This study analyzes a retailer’s store brand quality decision in vertically differentiated product categories. We analyze a game theoretic model composed of one or two national brand manufacturers and a retailer, who strategically chooses the quality level(s) of its store brand(s) relative to the well-established national brand position(s) to maximize its category profit. Our analysis reveals that the nature of a retailer’s store brand quality positioning is quite different from the manufacturer’s national brand positioning decision, and that the best position for a store brand is not “as close to a national brand as possible” as previous studies suggest. Instead, the optimal quality position of each store brand is remarkably sensitive to the distribution of consumers’ willingness-to-pay. In particular, the relative proportions of quality sensitive consumers and price sensitive consumers determine the balance of three key strategic forces — the market expansion force, the retail margin force, and the consumer profitability force, leading to different optimal product line designs for store brands across different category environments. Interestingly, against multiple incumbent national brands, the retailer’s optimal product line design includes a store brand positioned at the highest quality level in the category only if most consumers are moderately quality conscious. We also analyze the implications of national brands’ brand equity for retailers’ store brand strategy.

Exact First-Choice Product Line Optimization

Which products should a firm offer based on its customers’ preferences? This is the question posed in the problem of product line design, a well-studied and notoriously difficult problem that is central in marketing science. In “Exact First-Choice Product Line Optimization” by Dimitris Bertsimas and Velibor V. Mišić, the authors propose a new approach for solving this problem when segments of customers choose products according to a ranking. They propose a new mixed-integer optimization model of the problem, which they show to be tighter than prior formulations, and a solution approach based on Benders decomposition, which exploits the surprising fact that the subproblem can be solved efficiently for both integer and fractional master solutions. A well-known product line instance based on a conjoint data set of over 3,000 products and 300 respondents, which required a week of computation time to solve in prior work, is solved by the authors’ approach in just over 10 minutes.

Exact First-Choice Product Line Optimization

A fundamental problem faced by firms is that of product line design: given a set of candidate products that may be offered to a collection of customers, what subset of those products should be offered so as to maximize the profit that is realized when customers make purchases according to their preferences? In this paper, we consider the product line design problem when customers choose according to a first-choice rule and present a new mixed-integer optimization formulation of the problem. We theoretically analyze the strength of our formulation and show that it is stronger than alternative formulations that have been proposed in the literature, thus contributing to a unified understanding of the different formulations for this problem. We also present a novel solution approach for solving our formulation at scale, based on Benders decomposition, which exploits the surprising fact that Benders cuts for both the relaxation and the integer problem can be generated in a computationally efficient manner. We demonstrate the value of our formulation and Benders decomposition approach through two sets of experiments. In the first, we use synthetic instances to show that our formulation is computationally tractable and can be solved an order of magnitude faster for small to medium scale instances than the alternate, previously proposed formulations. In the second, we consider a previously studied product line design instance based on a real conjoint data set, involving over 3000 candidate products and over 300 respondents. We show that this problem, which required a week of computation time to solve in prior work, is solved by our approach to full optimality in approximately ten minutes.

Selection of an Optimal Network-Ranking Model to Achieve the Optimal Production Line Value Chain: a Case Study in the Textile Industry

Fulfilling needs and organisational resources with the least cost and highest quality is the main reason to achieve the optimal value chain. Application of most of the current techniques has merely been intended to choose the best scenario. However, industrial units need to build an ideal scenario as a value chain which focuses on intangible interstitial and hidden factors: good (good nature), bad (bad nature), fixed (obligatory nature) and free (not identifying their nature) and creates value. Therefore the model presented in this article answers this issue. First of all, we present a model based on the network approach of data envelopment analysis, then assess and rank the stages based on the scenarios for the stages forming the value chain, and finally the ideal decision unit is presented. For this reason, the general efficiency is designed with two natures; 1. input-centered (concentration on the costs) and 2. output-centered (concentration on the incomes).

Thermodynamic and economic analysis of nuclear power unit operating in partial cogeneration mode to produce electricity and district heat

This paper presents the methodology of techno-economic analysis for a nuclear unit operating in partial cogeneration mode and its application for the case study: a nuclear power plant planned in Poland. The research objectives were: to propose EPR, AP1000 and ESBWR nuclear condensing-extraction turbine systems modifications required for operation in cogeneration, to determine optimal heat production and heat transport line (HTL) parameters, to evaluate the technological feasibility of proposed solutions, to analyze profitability and competitiveness of the system versus coal-fired technologies. To adapt nuclear turbine to operation in partial cogeneration mode, the steam must be extracted from low-pressure (LP) section of the turbine and crossover pipe connecting high-pressure (HP) or intermediate-pressure (IP) section with LP section. Thermodynamic analysis proved that the operation of nuclear power plant at peak thermal load up to 250 MW neither requires to change primary cycle arrangements of considered nuclear units nor thermal capacities of nuclear reactors. Total annual costs of nuclear power plant operating in partial cogeneration were the lowest of all considered heat and power options, with all types of reactors, for the emission allowance price of 27 EUR/t CO2-eq. The specific cost of heat from nuclear cogeneration option was 10.3–12.7 EUR/GJ.

Improving configuration of complex production lines via simulation-based optimization

Optimizing the configuration of a complex production line is an NP-hard problem in various machine settings. Solving real-life-size instances of this problem becomes a more common challenge because the current trend of reshoring induces multi-national firms to transfer manufacturing facilities from workforce-intensive to capital-intensive production environments which usually require re-configuration of the transferred manufacturing systems according to the availability of better machinery in a capital-intensive environment. This paper focuses on the problem of optimizing production line configuration and proposes several simulation-based optimization approaches based on myopic search, ant-colony, simulated annealing, and response-surface methodologies. We investigate the relative performances of these proposed algorithms on a real-life manufacturing system transfer case in automotive industry according to solution quality and computation-time metrics under different parameter scenarios. Thus, our numerical results may guide the decision makers in choosing a suitable solution approach for this problem depending on the problem size and time availability. Our results also illustrate that ant-colony optimization, a methodology not widely applied in simulation-based optimization, provides high-solution quality for this problem when matched-up with a myopic search to find a good initial solution.

Cost Drivers of Versioning: Pricing and Product Line Strategies for Information Goods

In this paper, we extend the understanding of versioning strategy of an information goods monopolist and provide new insights on when versioning is optimal. To do so, we derive the optimal product line or versions of an information good and the corresponding prices. By relaxing common assumptions on consumers’ usage costs, versioning costs and capital research and development costs, we provide new insights as well as reconcile extant findings on versioning. For a good with no-free-disposal (NFD), i.e., one where consumers have usage costs, our results show that a monopolist’s marginal cost and consumers’ usage costs have the same impact on its versioning strategy, and that these factors are the sole reason for optimality of versioning of information goods. By endogenizing the production of the highest-quality, we show that capital costs create a downward distortion of quality even for the highest types in the market even under full information. Presence of separate versioning costs also lowers the qualities served to the high types and reduces the segment of consumers who are served with product versions. However, versioning costs do not affect market coverage or the price-quality menu itself. Further, when some of the consumer usage costs are absorbed by the firm (as in case of cloud-based provisioning), it does not necessarily lead to market expansion. This paper was accepted by Chris Forman, information systems.