Modeling process-switching decisions under product life cycle uncertainty

Ranga Ramasesh, Devanath Tirupati and Constantin A. Vaitsos

International Journal of Production Economics, 2010, vol. 126, issue 2, 236-246

Abstract: We address the process-switching decision of a firm that adopts a mixed process strategy with respect to a new product in the context of product life cycle uncertainty. A mixed process strategy uses a flexible process in the early stages of the product's life cycle and later switches to a dedicated process to gain cost economies. We present a model that captures uncertainty through alternative life-cycle demand functions to guide the process-switching decision. We develop a dynamic decision rule that can be used with any uncertainty-resolution scheme and demonstrate its application and robustness using an illustrative numerical example.

Keywords: Process-switching; strategy; Product; life; cycle; uncertainty; Production; economics; Conceptual; modeling; Decision; support (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:126:y:2010:i:2:p:236-246

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