On the optimal frequency of multiple generation product introductions

This paper considers a firm that introduces multiple generations of a product to the market at regular intervals. We assume that the firm has only a single production generation in the market at any time. To maximize the total profit within a given planning horizon, the firm needs to decide the optimal frequency to introduce new product generations, taking into account the trade-off between sales revenues and product development costs. We model the sales quantity of each generation as a function of the technical decay and installed base effects. We analytically examine the optimal frequency for introducing new product generations as a function of these parameters. (C) 2015 Elsevier B.V. All rights reserved.


Published in:
European Journal Of Operational Research, 245, 3, 805-814
Year:
2015
Publisher:
Amsterdam, Elsevier Science Bv
ISSN:
0377-2217
Keywords:
Laboratories:




 Record created 2015-09-28, last modified 2018-03-17


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