Adaptive product configuration model

A computer-implemented method comprising the steps of:

• inputting into one or more computers an inventory statement which comprises a plurality of existing product configurations and a plurality of components corresponding to each of said plurality of existing product configurations;
• inputting into said one or more computers product configuration rules which govern assembly of one or more of said plurality of components into product configurations which include said plurality of existing product configurations;
• applying, with said one or more computers, the product configuration rules to an excess of at least one component of at least one existing product configuration of said plurality of existing product configurations of said inventory statement;
• generating, with said one or more computers, a build plan for said product configurations which includes one or more of said plurality of existing product configurations and at least one new product configuration which is different from each of said plurality of existing product configurations which consumes at least one of said excess of said at least one component from said inventory statement,
• wherein said step of generating the build plan utilizes an integrated master optimization problem solving and dual optimization problem solving strategy in said one or more computers, wherein said integrated master optimization problem solving and dual optimization problem solving strategy accounts for
• a) costs for substitutions, costs for backlogging demand, costs for holding inventory, costs for overproducing existing product configurations, and costs for producing said new product configurations;
• b) ensuring production quantity for an existing product configuration is always non-negative;
• c) limiting total build quantity of said existing product configurations and said new product configurations to a specified tolerance over an original demand forecast;
• d) assuring a required quantity of said at least one component does not exceed a supply of said at least one component;
• e) conforming to contractual agreements on supply-committed component inventories;
• and
• f) assuring said at least one new product configuration contains a squared set of components.