Analysis of the Effects of Product Variety on the System Logistics Operations

Abstract

This study develops an analytical model to investigate the effects of the product variety on the performance of the supply chain system while considering both the fixed capacity and incremental capacity, respectively. The main objective of the optimized management of product variety is to reduce variety-induced complexities and the associated costs for the supply chain system. There will be trade-offs with the level of product variety in terms of the obtainable revenue and the variety-related cost factors. This work studies the impact of product variety on profit profile. In this work, we perform a simulation study by considering the operational characteristics of warehouse operations with the level of product variety on the system performance. The simulation work examines the optimal level of product variety and how the corresponding selection of products changes depending on the cost and revenue features of products.