On the optimal frequency of multiple generation product introductions

Shuangqing Liao and Ralf W. Seifert

European Journal of Operational Research, 2015, vol. 245, issue 3, 805-814

Abstract: 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.

Keywords: OR in research and development; Frequency of new product introduction; Time-pacing (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:245:y:2015:i:3:p:805-814

DOI: 10.1016/j.ejor.2015.03.041

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