Analyzing Product-Mix Change Decisions Based on Realized Demand Data and Operational Constraints an Application to the Iraqi State Company for Food Industries and Its Effect on Operational Value Maximization

Abstract

The paper investigates the impacts of product-mix change decisions using the actual demand information and operational limitations on the optimization of the operational values of five food-industry firms in Iraq throughout 20152025. The analysis applies the operational indicators that are measurable to capture the intensity of the portfolio reallocation using Mix-Shift Index (PMIX_MSI), market-production mismatch using Realized Demand Gap Rate (RDG_RATE), bottleneck pressure using Constraint Utilization Rate (CU_RATE), as well as the operational quality of the chosen mix using the index of the Weighted Contribution Margin (WCM_IQDK), whereas the dependent variable is operationalized as Realized Operational Value (OV_IQD_BN). The tests of cross-section dependence point to a number of series co-moving across firms, in line with exposure to common shocks, and unit root tests of stationarity are considered based on dependent panel-appropriate unit root procedures. The paper then estimates an ARDL error-correction specification in order to capture short-run and long-run equilibrium effects. The findings show that increased bottleneck utilization and robust product-mix reallocation are linked to high long-run operational value, and continued experienced gaps in realized demand diminish value. The significant error-correction term provides a consistent long-run relationship and a systematic adjustment procedure towards equilibrium after the disturbance of demand or capacity. The study suggests building a cycle of realized-demand-driven product-mix review, the adoption of product selection and pricing based on the profits of the bottlenecks, and a small dashboard of mix, mismatch, and constraint indicators that will decrease demand gaps and enhance the results of operational value.