A Survey of New Product Forecasting Practices in Industrial High Technology and Low Technology Businesses

Exploring quality management practices and high tech firm performance

“…Because we did not have the data on R&D expenditures of firms in the sample, SIC codes were used to identify the high technology firms in this study. Based on the literature (Bruton & Wan, 1994;Harpaz & Meshoulam, 1997;Hoyt & Matuszek, 2001;Lee & Shim, 1995;Liao & Cheung, 2002;Lynn, Schnaars, & Skov, 1999;Maryland Career & Workforce Information, 2002;McGee & Dowling, 1995;PriceWaterhouseCoopers, 2000;Rausch, 1998;Smith & Zahrly, 1993;The Chemical Industry, 2002;Wang, Lee, & Huang, 2003;Watanabe, Kishioka, & Nagamatsu, 2004;Wilbon, 2002), the following SIC codes emerged as industries in which high technology firms operate: 28, 346, 35, 36, 37, 38 (see Table 2 for the definition of industries). Thus, the firms with these SIC codes comprised the sample of high technology firms; the firms with other SIC codes in the sample were eliminated.…”

Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies

“…Despite these complexities, sales forecasting remains a key determinant of superior planning and resource allocation because it is a key ingredient for managerial decision making (Lynn, Schnaars, & Skov, 1999;Rieg, 2010). Indeed, executives and managers rely on sales forecasts to make decisions that define strategic alternatives and how resources are allocated in the organization (Lynn, Schnaars, & Skov, 1999).…”

“…Simpson (2000) reported that 59% of procurement respondents believed that sales forecasts were only somewhat accurate. Because forecasts are relied upon as if they are accurate and are reference points for managerial decision-making (Lynn et al, 1999), imprecise forecasts cause firms to absorb superfluous carrying costs and/or liquidate excess inventory when consumer product demand subsides. In the latter case, companies may be required to take actions such as selling excess inventory below cost or disassembling manufactured products and reselling the standardized parts.…”

An analytic network process approach for sales forecasting

“…While numerous researchers have proposed different models to forecast sales for new products, there is little systematic understanding about which of these models works best, and under what circumstances these findings change (Lynn et al 1999). As a result, one of the key problems encountered with new product forecasting models is that while there are many models to choose, there is little indication as to which ones are the most effective in a given application.…”

“…In high technology businesses such as computers and telecommunications change is rapid and the rate of new product introduction is fast and frequent, meaning data series are often short or nonexistent. In addition, the innovations themselves are often more radically new, making their adoption by consumers more consequential (Lynn et al 1999). It seems unlikely to expect that all new product forecasting models work with equal effectiveness regardless of product and market characteristics.…”