Presentation
Application of Dynamic State Variable Models on Multiple-Generation Product Lines with Cannibalization across Generations
IIE Annual Conference
(2012)
Abstract
Multiple-generation product strategy is favored in a variety of markets. Instead of introducing a single product
to the market, companies incline to introduce a line of multiple-generation products to the market to better
utilize technology assets and resources in an elongated time span. For such product development and launch
scenarios, cannibalization can occur however. That is, when a new product generation comes to the market, the
current generation is not withdrawn from the market but remains in the market to compete with the new one. In
this research, we propose a new framework to predict the sales and introduction timing for every product
generation in a multiple-generation product line. Based on historical sales trend from a similar product of an
existing and mature market, the proposed framework can effectively predict the performance of the entire
product line over its lifecycle. In this study, we demonstrate a case study implementing the proposed framework
on Apple Incorporation’s iPhone product line. The result shows that the forecast performance of the model is
very close to real data.
Keywords
- Dynamic state variable model,
- stochastic dynamic programming,
- multiple-generation product line,
- sales forecast
Disciplines
Publication Date
2012
Comments
This is a proceeding published as Lin, Chun-yu, and Gül E. Okudan. "Application of Dynamic State Variable Models on Multiple-Generation Product Lines with Cannibalization across Generations." In IIE Annual Conference. Proceedings, p. 1. Institute of Industrial and Systems Engineers (IISE), 2012. Posted with permission.
Citation Information
Gül E. Kremer and Chun-Yu Lin. "Application of Dynamic State Variable Models on Multiple-Generation Product Lines with Cannibalization across Generations" IIE Annual Conference (2012) Available at: http://works.bepress.com/gul-kremer/123/