Characterization of demand for short life-cycle technology products

Berrin Aytac () and S. Wu ()

Annals of Operations Research, 2013, vol. 203, issue 1, 255-277

Abstract: Most technology companies are experiencing highly volatile markets with increasingly short product life cycles due to rapid technological innovation and market competition. Current supply-demand planning systems remain ineffective in capturing short life-cycle nature of the products and high volatility in the markets. In this study, we propose an alternative demand-characterization approach that models life-cycle demand projections and incorporates advanced demand signals from leading-indicator products through a Bayesian update. The proposed approach describes life-cycle demand in scenarios and provides a means to reducing the variability in demand scenarios via leading-indicator products. Computational testing on real-world data sets from three semiconductor manufacturing companies suggests that the proposed approach is effective in capturing the life-cycle patterns of the products and the early demand signals and is capable of reducing the uncertainty in the demand forecasts by more than 20%. Copyright Springer Science+Business Media, LLC 2013

Keywords: Cumulative demand life cycle; Advanced demand information; Bayesian updating; Variability in demand (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s10479-010-0771-5

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