Volume and Cost Implications of Product Portfolio Complexity

Business leaders are concerned about the impacts of increasing levels of product portfolio complexity since many sense that complexity related costs such as order management, procurement, and inventory threaten to undermine operational efficiencies and consume profits. Even so, managers do not fully understand the extent and breadth of the impacts of product portfolio complexity. A more complete understanding of the operational effects of product portfolio complexity is lacking partially because researchers have not yet offered a robust theoretical perspective or studied it in a focused controlled way; until now. Herein, measures of product portfolio complexity are developed and related to sales volume and supply chain costs. Revealed are nonlinearities which imply optimal portfolio configurations and an approach to quantifying the most profitable configurations. This books is of interest to the corporate manager or consultant seeking a greater understanding of the topic and wanting to maximize organizational performance. It will also be of interest to the academic who wishes to understand theoretical underpinnings of product portfolio complexity