| Summary: | 碩士 === 國立中興大學 === 科技管理研究所 === 97 === Demand uncertainty frequently draws business’s attention and this burden of demand variability becomes tougher to cope with when managers face the often seen complex supply chains. Firms attempt to employ various approaches to take advantage of the risk-pooling effect. In this study, we investigate the risk-pooling effect of demand switching ratio for multiple products and its impact on selecting among various paths. We develop a model and a comparison framework to evaluate the various paths: three paths and two paths, with possible demand switching ratio for multiple products. The challenges in this decision lie in “how” and “how much” to switch. Demand substitution by persuading customers to purchase the substitute item instead of the original item they had in mind has been frequently used to reduce the total demand variability and thus reduce the need for inventory. Next, we point out the influence of the demand substitution in profit of the companies on various paths. In our study, it is found that demand substitution will not always reduce the costly consequences associated with uncertainty of demand. We also proposed a new Algorithm to reduce time that practitioners can get optimum and exacter product switching rates of demand substitution with multiple products. It is also interesting to note that the total profit in four cases may be influenced by various paths and original correlations coefficients. At last, our numerical examples help managers to gain the managerial insight of taking advantage of the risk-pooling effect, and to illustrate the application of the proposed various paths.
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