Component allocation in multi-echelon assembly systems with linked substitutes
Computers and Industrial Engineering
A New Decision Rule for Lateral Transshipments in Inventory Systems
Management Science
Assortment Planning and Inventory Decisions Under a Locational Choice Model
Management Science
Dynamic Pricing and Inventory Control of Substitute Products
Manufacturing & Service Operations Management
Dynamic Capacity Management with Substitution
Operations Research
Polyhedral analysis for the two-item uncapacitated lot-sizing problem with one-way substitution
Discrete Applied Mathematics
CCDC'09 Proceedings of the 21st annual international conference on Chinese Control and Decision Conference
Optimal ordering policy for perishable high-tech products based on substitutable demand
CCDC'09 Proceedings of the 21st annual international conference on Chinese control and decision conference
Assortment Planning and Inventory Decisions Under Stockout-Based Substitution
Operations Research
On the Interaction Between Demand Substitution and Production Changeovers
Manufacturing & Service Operations Management
Computers & Mathematics with Applications
Dynamic selling of quality-graded products under demand uncertainties
Computers and Industrial Engineering
Optimal Algorithms for Assortment Selection Under Ranking-Based Consumer Choice Models
Manufacturing & Service Operations Management
A general framework for cooperation under uncertainty
Operations Research Letters
Managing individual customer service constraints under stochastic demand
Operations Research Letters
Journal of Intelligent Manufacturing
Proceedings of the Winter Simulation Conference
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We study a single period multiproduct inventory problem with substitution and proportional costs and revenues. We consider N products and N demand classes with full downward substitution, i.e., excess demand for class i can be satisfied using product j for i ≥ j. We first discuss a two-stage profit maximization formulation for the multiproduct substitution problem. We show that a greedy allocation policy is optimal. We use this to write the expected profits and its first partials explicitly. This in turn enables us to prove additional properties of the profit function and several interesting properties of the optimal solution. In a limited computational study using two products, we illustrate the benefits of solving for the optimal quantities when substitution is considered at the ordering stage over similar computations without considering substitution while ordering. Specifically, we show that the benefits are higher with high demand variability, low substitution cost, low profit margins (or low price to cost ratio), high salvage values, and similarity of products in terms of prices and costs.