Optimal lot-sizing, pricing, and product intergenerational lifestyle decisions for the case of disruptive innovations in fashion

The objective of this dissertation is to determine production schedules, production quantities, selling prices, and new product introduction timing to fulfill deterministic price-dependent demand for a series of products in such a way as to maximize profit per period. In order to accomplish the above task, some main assumptions are made. First, it is assumed that the series of products being considered are associated with sequential non-disruptive innovations in technology as well as disruptive innovations in fashion. That is to say, the products represent subsequent generations in the same family of products in an industry that experiences repeated minor technological innovations and in which product success is due in part to fashionability (Fisher, 1997). Second, it is assumed that the planning horizon is sufficiently long and product lifecycles are sufficiently short that several generations of the product family are planned. Third, it is assumed that the producer is following a solo-product roll strategy (Billington, Lee, & Tang, 1998). This means that the inventory of one product iteration is exhausted at the same time that the next product iteration is introduced and ready for sale. Fourth, it is assumed that demand for each product iteration is governed by a modified version of the Bass (1969) diffusion model that incorporates price. Fifth, it is assumed that the various demand and cost characteristics being considered do not change from one product iteration to the next. Sixth, it is assumed that no backlog of demand is maintained and that any unmet demand is lost. Seventh, it is assumed that the manufacturer is a monopolist or at least the dominant member of a market that is made up of it and smaller competitors that are not large enough to affect the market in a meaningful way. The formulated profit maximization problem uses the Thomas (1970) model which in turn depends in its solution on theorems first presented by Wagner and Whitin (1958a). An extensive numerical study that aims at examining the sensitivity of the planned product lifecycle length and profit per period to changes in model parameters is performed using software developed especially for that purpose. The results of the analysis reveal that the above two measures are more sensitive to changes in market-oriented parameters than to changes in operations-oriented parameters. Managerial implications of the research findings are discussed

Essays on Issues in New Product Introduction: Product Rollovers, Information Provision, and Return Policies

In this dissertation we study several key issues faced by firms while introducing new products to market. The first essay looks at product rollovers: introduction of a new product generation while phasing out the old one. We study the strategic decision of dual vs. single roll jointly with operational decisions of inventory and pricing during this transitional period. Our results confirm previous findings and uncover the role and interaction of several parameters that were not examined before. In the second essay, we investigate the role of information provision and return policies in the consumer purchasing behavior and on the overall market outcome. We build a novel model of consumer learning, and we attain significant analytical findings without making any distributional assumptions. We then fully study the joint optimization problem analytically under uniform valuations. In the third essay, we study competition in the framework described in the second essay and we identify the potential Nash equilibria and associated conditions. Our findings demonstrate the effect of competition on return policy and information provision decisions and provide insight on some real-life observations

Developments in manufacturing technology and economic evaluation models

"May 1989"--t.p. "April 1989"--3rd prelim. page. "Prepared for Logistics of production and inventory"--3rd prelim. page.Includes bibliographical references.by Charles H. Fine

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

Understanding new products’ market performance using Google Trends

This paper seeks to empirically examine diffusion models and Google Trends’ ability to explain and nowcast the new product growth phenomenon. In addition to the selected diffusion models and Google Trends, this study proposes a new model that incorporates the two. The empirical analysis is based on the cases of the iPhone and the iPad. The results show that the new model exhibits a better curve fit among all the studied ones. In terms of nowcasting, although the performance of the new model differs from that of Google Trends in the two cases, they both produce more accurate results than the selected diffusion models

Design Choices and Adoption Processes: from Engineering Designed Products to Services

L'abstract è presente nell'allegato / the abstract is in the attachmen

Timing and ordering decisions under single and dual product rollover strategies

Ankara : The Department of Industrial Engineering and the Graduate School of Engineering and Science of Bilkent University, 2011.Thesis (Master's) -- Bilkent University, 2011.Includes bibliographical references leaves 67-69.In many industries, firms replace products that have been introduced to the market and that are in advanced stages of their life cycles. The process of introducing a new product and eventually displacing an old one is referred to as product rollover. In planning for new product introduction, it is very important that careful business decisions are made for phasing out the old product, as the related costs may be significant. In this thesis, we study the ordering and timing decisions of a supplier for successive generations of a product under two different strategies: single product rollover and dual product rollover. In both cases, we present models explicitly accounting for inventory holding costs, salvage value, lost sale cost, demand uncertainty of both the products and product cannibalization. We report the results of an extensive numerical study to investigate the structural properties of the expected profit function, and how the optimal timing and ordering decisions change under different settings.Aras, Ahmet KorhanM.S