Mitigating Hi-tech products risks due to rapid technological innovation

P.C. Yang, H.M. Wee, B.S. Liu and O.K. Fong

Omega, 2011, vol. 39, issue 4, 456-463

Abstract: The risks on international trade have increased continuously in recent years. One such risk for Hi-tech products is the result of rapid technological innovation, which results in a significant decline in the component cost, the selling price and the demand (due to newer products introduction). The Hi-tech products include computers and communication consumer products. From a practical viewpoint, there is a need to develop an innovative replenishing policy to consider the impact of the risk. In this paper, an economic order quantity model with finite planning horizon is developed for a buyer, when the component cost, the selling price and the demand rate of the end-consumer decline at a continuous rate. A numerical example and sensitivity analysis for two case studies are carried out to illustrate this model.

Keywords: Hi-tech; products; Innovation; Replenishment; policy; Risks (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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