THE EFFECTS OF QUALITY COST, INVENTORY AND CAPACITY LIMITS ON SUSTAINABLE PRODUCT VARIETY

Abstract

Increase in diversity of customer needs cause transformation of mass marketing to target marketing. Companies demanding competition advantage provide different products for diversified customer needs and try to survive on the market. The increasing number of product portfolio makes product management harder, increases quality and production costs, and increase customer hesitation and dissatisfaction. Hence, companies need to restraint products which are provided. Companies head towards product optimization in order to find optimal product number for customer satisfaction. Additionally, companies follow environmental and social parameters in addition to financial parameters and sustainability applications are getting common. Different from previous studies, this paper presents a model in order to determine and analyze environmental, social and economic parameters simultaneously. In this study, analysis for sustainable product preference and stocking area, quality cost, production limits are studied. Their effects on SKU number and product selection is investigated. Besides, the analysis for product selection is presented as the sustainability sensitivity of customer increases.