Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint

Ho, Teck-Hua; Savin, Sergei; Terwiesch, Christian

doi:10.1287/mnsc.48.2.187.257

Cited by 170 publications

(107 citation statements)

References 13 publications

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“…From a Marketing perspective, works of interest are mainly the ones that analyse how to incorporate SC dynamics into NPD: some papers (Ho, Savin, & Terwiesch , 2002;Jain, Mahajan, & Muller, 1991) suggest a joint analysis of demand and sales dynamics under the presence of supply restrictions (e.g. backordering and customer losses).…”

Section: Literature Reviewmentioning

confidence: 99%

“…delay of the diffusion process) for the unavailability of the product due to the production capacity or distribution system limitations. An upgrade of this work is provided by Ho et al (2002), which highlight how operations/SCM literature usually consider the demand process as given in order to plan capacity, while in marketing literature NPD models are usually assumed not capacity-constrained. The two aforementioned papers modify BM in order to forecast demand but not for the design of optimal manufacturing policies.…”

Section: Literature Reviewmentioning

confidence: 99%

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Supply chain network design for the diffusion of a new product

Stritto¹,

Falsini²,

Schiraldi³

2013

Int. J. Eng. Sci. Tech

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Supply Chain Network Design (SCND) deals with the determination of the physical configuration and infrastructures of the supply chain. Specifically, facility location is one of the most critical decisions: transportation, inventory and information sharing decisions can be readily re-optimized in response to changes in the context, while facility location is often fixed and difficult to change even in the medium term. On top of this, when designing a supply network to support a new product diffusion (NPD), the problem becomes both dynamic and stochastic. While literature concentrated on approaching SCND for NPD separately coping with dynamic and stochastic issues, we propose an integrated optimisation model, which allows warehouse positioning decisions in concert with the demand dynamics during the diffusion stage of an innovative product/service. A stochastic dynamic model, which integrates a Stochastic Bass Model (SBM) in order to better describe and capture demand dynamics, is presented. A myopic policy is elaborated in order to solve and validate on the data of a real case of SCND with 1,400 potential market points and 28 alternatives for logistics platforms.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Supply chain network design for the diffusion of a new product

Stritto¹,

Falsini²,

Schiraldi³

2013

Int. J. Eng. Sci. Tech

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“…Mahajan et al (2000) point out that new product diffusion models have two different strategic decisions: prelaunch/launch decisions vs. postlaunch decisions. In postlaunch diffusion research, Mahajan et al (2000) illustrate six applications: timing of successive generations, capacity decisions with product diffusion (Jain et al, 1991;Ho, Savin and Terwiesch, 2002), determining the market value on anticipated penetration (Kim, Mahajan and Srivastava, 1995), market saturation assessment and expansion opportunity for the retailers (Mahajan, Sharma, and Kerin, 1988), estimation of lost sales due to pirated sales (Givon, Mahajan and Muller, 1995), and lost sales due to patent infringements (Mahajan, Sharma, and Buzzell, 1993).…”

Section: Multi-function Productsmentioning

confidence: 99%

Single firm product diffusion model for single-function and fusion products

Chen¹,

Carrillo²

2011

European Journal of Operational Research

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The prosperity of multifunction products (also referred to as fusion products) has changed the landscape of the marketplace for several electronics products. To illustrate, as fusion products gain popularity in cellular phones and office machines, we observe that single-function products (e.g., stand-alone PDAs and stand-alone scanners) gradually disappear from the market as they are supplanted by fusion products. This paper presents a product diffusion model that captures the diffusion transition from two distinct single-function products into one fusion product. We investigate the optimal launch time of the fusion product in various conditions and conduct a numerical analysis to demonstrate the dynamics among the three products. Similar to previous multi-generation single product diffusion models, we find that the planning horizon, the products' relative profit margin, and substitution effects are important to the launch time decision. However, there are several unique factors that warrant special consideration when a firm introduces a fusion product to the market: the firm's competitive role, buyer consolidation of purchases to a multifunction product, the fusion technology and the age of current single-function products.

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“…In this literature, Ho et al (2002), Kumar and Swaminathan (2003), and Shen et al (2011) study the sales planning problem of a manufacturer who aims to maximize the total profit over a product life cycle under supply constraints. Satisfying all current demand upon introduction of a new product may lead the future demand to grow rapidly (thanks to the positive word-of-mouth effect).…”

Section: Introductionmentioning

confidence: 99%

New Product Diffusion in Closed-Loop Supply Chains

Kaya¹,

Nadar²,

Güler³

2016

SSRN Journal

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In this thesis, we develop a dynamic model for sales planning of a manufacturer who sells new and remanufactured versions of a product. Demand arrives over a finite life cycle according to the slightly modified Bass diffusion process. End-ofuse product returns required for remanufacturing are constrained by the earlier sales. In this setting the manufacturer may simultaneously improve its economic and environmental performance by partially satisfying the initial demand. This can indeed occur when innovators contribute more heavily than imitators to the diffusion process, remanufacturing has a significantly large profit margin, or an unmet demand is very likely to be backlogged to be satisfied with a remanufactured product. But a very large backlogging rate may inflate the future demand if the initial sales volume is low, making it difficult to ensure a sufficient returns volume for remanufacturing. The manufacturer thus sells more under a very large backlogging rate, and a poorer environmental performance results. The optimal sales plans also differ across product types: The manufacturer of a search good has the advantage of keeping the future demand intact regardless of the initial sales, compared to the manufacturer of an experience good. Partially satisfying the demand can thus be desirable for search goods under a greater number of imitators, a lower margin from remanufacturing, or a lower backlogging rate. However, if partially satisfying the demand is desirable for both product types, the manufacturer of a search good sells more to enable a sufficient returns volume for the larger future demand. Bu tezde, birürünün yeni ve yeniden imal edilen halini satan birüretici için dinamik bir satış modeli geliştirdik.Ürünün talebi sonlu birürün hayat döngüsü boyunca belli oranda degiştirilmiş Bass yayılım sürecine göre gerçekleşmektedir. Yeniden imalat için gerekli olan kullanımı tamamlanmışürün miktarı erken dönemdeki satış ile kısıtlanmıştır. Bu modelde,üretici başlangıçtaki talebi kısmen karşılayarak ekonomik veçevresel performansını aynı anda geliştirebilir. Bu durum yenilikçi müşteriler yayılım sürecine taklitçi müşterilerden daha fazla katkı yaptıgında, yeniden imalatın kar payıçok yüksek oldugunda, veya karşılanmayan talep daha sonra yeniden imal edilenürünle yüksek ihtimalle karşılanabildiginde gerçekleşebilir. Ancak,çok yüksek birikmiş talep katsayısı eger başlangıçtaki satış hacmi düşükse gelecekteki talebişişirebilir ve yeterli miktarda kullanımı tamamlanmışürünün geri dönüşünü zorlaştırabilir. Bu yüzdenüretici yüksek birikmiş talep katsayısı altında daha fazla satış yapar ve bunun sonucundaçevresel performansını düşürür. En iyi satış planıürünün tipine göre degişiklik göstermektedir: araştırılanürünleri satan birüretici, deneyimürünlerini satan birüreticiden farklı olarak, başlangıç satış miktarından bagımsız birşekilde gelecek talebini koruyabilmektedir. Bu yüzden, araştırılanürünlerin talebini kısmen karşılamak taklitçi müşteri sayısı yüksek oldugunda, yeniden imalatın kar payı düşük oldugunda ya da bi...

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Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint

Cited by 170 publications

References 13 publications

Supply chain network design for the diffusion of a new product

Supply chain network design for the diffusion of a new product

Single firm product diffusion model for single-function and fusion products

New Product Diffusion in Closed-Loop Supply Chains

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