Customer Preferences, Supply-Chain Costs, and Product-Line Design

  • Fangruo Chen
  • Jehoshua Eliashberg
  • Paul Zipkin
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 10)


The modeling framework developed here to address the positioning and pricing of a product line assumes that products differ in price and in a single physical attribute. It incorporates a flexible representation of customer heterogeneity, allowing for price-sensitive demand, and a rich class of supply-chain cost models. A key characteristic of potentially optimal product lines, termed the cross-point property, is used to develop efficient dynamic programming algorithms to determine an optimal product line.


Product Line Maximum Profit Reservation Price Setup Cost Total Demand 
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Copyright information

© Springer Science+Business Media New York 1998

Authors and Affiliations

  • Fangruo Chen
    • 1
  • Jehoshua Eliashberg
    • 2
  • Paul Zipkin
    • 3
  1. 1.Columbia UniversityUSA
  2. 2.The Wharton SchoolUniversity of PennsylvaniaUSA
  3. 3.Duke UniversityUSA

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