Time and Form Postponement Competition under Dynamic Behavior of Demand

Yohanes Kristianto
University of Vaasa, Finland

Petri T. Helo
University of Vaasa, Finland

This paper studies assembly-to-order (form postponement) and make-to-stock (time postponement) duopolistic competition under dynamic price and production strategies for two differentiable products, which share common components at a certain degree of substitution. Both strategies are benchmarked according to the Bertrand and Cournot Stackelberg game. In addition, dynamic game is applied to show the long term effect of both strategic decisions (price and production quantity) on profit and against demand uncertainty. The results show that precommited production is appropriate for high modular products and precommited price for special orders. The final part of the paper concludes the results and outlines future research directions.

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