A heuristic-based approach to integrate the product line selection decision to the supply chain configuration

Abstract

Product platform development (PPD) as an approach to mass customisation (MC) helps an organisation to reduce costs as well as ensure timely deliveries. Varieties are offered to different market segments by combining and incorporating different modules at different levels. Modules at different levels are essentially features that a customer segment is looking for. It is apparent that overall optimisation would require simultaneous consideration of not only PPD but also other supply chain constraints. In this paper, an attempt has been made to develop a mixed integer linear programming (MILP) model for sourcing, production planning, and PPD decisions. Based on analyses of the model, a heuristic solution procedure has been suggested. The heuristic developed in this paper attempts to decompose the problem and then assimilate the outputs from the simpler parts to obtain the final solution. Finally, a simple example to illustrate the solution procedure is presented.