Heuristic Genetic Algorithm for Product Portfolio Planning

Abstract

This chapter applies the Genetic Algorithm to help manufacturing companies plan their product portfolio. Product portfolio planning (PPP) is a critical decision faced by companies across industries and is very important in helping manufacturing companies keep their competitive advantage. PPP has been classified as a combinatorial optimization problem, in that each company strives for the optimality of its product offerings through various combinations of products and/or attribute levels. Towards this end, this chapter develops a heuristic genetic algorithm (HGA) for solving the PPP problem. The objective of this chapter is to develop a practical method that can find near optimal solutions and assist marketing managers in product portfolio decision-making.