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Incorporating manufacturing lead times in joint production-marketing models: A review and some future directions

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Abstract

In many industries the pricing of a product over time can be used to manage demand for the product. Lead time, or promised delivery time is often a significant factor in price negotiations. However, the production planning literature has largely treated pricing decisions as exogeneous while focusing on the allocation of production capacity between products over time. On the other hand, the marketing literature has generally ignored the effects of capacity constraints and focused on the effects of pricing.

In this paper, we begin by reviewing the existing literature on integrative production-marketing research, focusing on those models that consider lead times and capacity. We suggest a number of directions for future research that take advantage of recent developments in production planning models, as well as explicit modeling of feedback loops governing key parameters, which suggest a broader view of the problem.

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Authors and Affiliations

  1. Laboratory for Extended Enterprises at Purdue, School of Industrial Engineering, Purdue University, 315 N. Grant Street, West Lafayette, IN, 47907-2023, USA

    Abhijit Upasani

  2. Edward P. Fitts Department of Industrial and Systems Engineering, North Carolina State University, 300 Daniels Hall, Raleigh, NC, 27695-7906, USA

    Reha Uzsoy

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  1. Abhijit Upasani
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  2. Reha Uzsoy
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Correspondence to Reha Uzsoy.

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Upasani, A., Uzsoy, R. Incorporating manufacturing lead times in joint production-marketing models: A review and some future directions. Ann Oper Res 161, 171–188 (2008). https://doi.org/10.1007/s10479-007-0294-x

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  • DOI: https://doi.org/10.1007/s10479-007-0294-x

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