Industrial Engineering and Management Systems

Korean Institute of Industrial Engineers (대한산업공학회)
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An Exploration on the Use of Data Envelopment Analysis for Product Line Selection

  • Lin, Chun-Yu (Department of Industrial and Manufacturing Engineering, The Pennsylvania State University) ;
  • Okudan, Gul E. (School of Engineering Design, The Pennsylvania State University)
  • Received : 2008.01.22
  • Accepted : 2008.09.14
  • Published : 2009.03.31
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Abstract

We define product line (or mix) selection problem as selecting a subset of potential product variants that can simultaneously minimize product proliferation and maintain market coverage. Selecting the most efficient product mix is a complex problem, which requires analyses of multiple criteria. This paper proposes a method based on Data Envelopment Analysis (DEA) for product line selection. Data Envelopment Analysis (DEA) is a linear programming based technique commonly used for measuring the relative performance of a group of decision making units with multiple inputs and outputs. Although DEA has been proved to be an effective evaluation tool in many fields, it has not been applied to solve the product line selection problem. In this study, we construct a five-step method that systematically adopts DEA to solve a product line selection problem. We then apply the proposed method to an existing line of staplers to provide quantitative evidence for managers to generate desirable decisions to maximize the company profits while also fulfilling market demands.

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References

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