Value of Stock Level Information and Impact on Manufacturers' Substitution Decisions
Value of Stock Level Information and Impact on Manufacturers' Substitution Decisions

Summary/Abstract: In this work, we study the product substitution decisions of a manufacturer that produces multiple items. We first quantify the cost savings due to flexibility attained through substitution. Ideally, the manufacturer must use the stock level information when giving production, scheduling and substitution decisions. In practice however, such decisions are often given ignoring the available information. In this work, we also address the importance of using stock level information by quantifying its value. Results show that using stock level information is critical especially when taking production scheduling decisions.

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