Downward substitution is common in many industries and occurs in supply chain management when a firm used a higher value item to satisfy the demand of a lower value item that is out of stock. This type of substitution is driven by the supplier in order to increase customer service quality and / or revenue. For example, a hotel might choose to fill its ... Read More

A key challenge in supply chain management is to match supply and demand of various products. In dealing with this challenge, substitution is a useful option of recourse for managing product inventories: when the demand for a certain type of product exceeds its supply, use another product type, often one of a higher grade in terms of quality or functionality ... Read More

Accidents, natural disasters, labor strikes, quality issues, machine breakdowns… such supply disruptions are the stuff of nightmares for senior managers. Two strategies widely used to mitigate these problems are source diversification and demand/pricing management. Researchers Xiting Gong, Xiuli Chao and Shaohui Zheng studied more efficient strategies of ... Read More