-Flexibility is a performance dimension that considers how quickly operations and supply chains can respond to the unique needs of customers.
Mix Flexibility is the ability to produce a wide range of products or services
Changeover Flexibility the ability to provide a new product with minimal delay
Volume Flexibility on the other hand is the ability to produce whatever volume the customer needs. It is the ability to effectively increase or decrease aggregate production in response to customer demand. Volume flexibility directly impacts supply chain's performance by preventing out-of-stock conditions for products that are suddenly in high demand or by preventing high inventory levels.
Volume flexibility refers to the tendency to generate below/above the fixed capability for a product, under the endogenous pricing in a two-product setting. It has been found that the value of volume flexibility is a function of demand correlation amongst the products, a consequence, which cannot be illustrated by classical risk-pooling opinions.
Additionally, the value of product flexibility always reduces in demand correlation, and the value of volume flexibility can decrease or increase in demand correlation on the basis of whether the products are strategic substitutes or complements.
