Postponement is less valuable for a firm that sells a variety of products with one dominant product than for a firm that has a portfolio of products that are equivalent in demand and revenue.

Question

Quizplus · Accepted Answer

If a firm has one dominant product, then the value of postponement is limited because the firm’s operations and supply chain are already geared towards producing that one product. On the other hand, if a firm has a portfolio of products that are equivalent in demand and revenue, then postponement can be more valuable as it allows the firm to delay customization until the order has been received, reducing inventory costs and increasing customer satisfaction.

Postponement Is Less Valuable for a Firm That Sells a Variety