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On the optimal frequency of multiple generation product introductions

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  • Liao, Shuangqing
  • Seifert, Ralf W.

Abstract

This paper considers a firm that introduces multiple generations of a product to the market at regular intervals. We assume that the firm has only a single production generation in the market at any time. To maximize the total profit within a given planning horizon, the firm needs to decide the optimal frequency to introduce new product generations, taking into account the trade-off between sales revenues and product development costs. We model the sales quantity of each generation as a function of the technical decay and installed base effects. We analytically examine the optimal frequency for introducing new product generations as a function of these parameters.

Suggested Citation

  • Liao, Shuangqing & Seifert, Ralf W., 2015. "On the optimal frequency of multiple generation product introductions," European Journal of Operational Research, Elsevier, vol. 245(3), pages 805-814.
    • Handle: RePEc:eee:ejores:v:245:y:2015:i:3:p:805-814
    DOI: 10.1016/j.ejor.2015.03.041
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    3. Rahman Khorramfar & Osman Y. Özaltın & Karl G. Kempf & Reha Uzsoy, 2022. "Managing Product Transitions: A Bilevel Programming Approach," INFORMS Journal on Computing, INFORMS, vol. 34(5), pages 2828-2844, September.
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    5. Seifert, Ralf W. & Tancrez, Jean-Sébastien & Biçer, Işık, 2016. "Dynamic product portfolio management with life cycle considerations," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 71-83.
    6. Bo Tan & Zhiguo Zhu & Pan Jiang & Xiening Wang, 2023. "Modeling Multi-Generation Product Diffusion in the Context of Dual-Brand Competition and Sustainable Improvement," Sustainability, MDPI, vol. 15(17), pages 1-22, August.
    7. Samuel Sale, R. & Mesak, Hani I. & Inman, R. Anthony, 2017. "A dynamic marketing-operations interface model of new product updates," European Journal of Operational Research, Elsevier, vol. 257(1), pages 233-242.
    8. Bayrak, Busra & Guray, Busra & Uzunlar, Nilsu & Nadar, Emre, 2024. "Diffusion control in closed-loop supply chains: Successive product generations," International Journal of Production Economics, Elsevier, vol. 268(C).
    9. Korn, Ralf & Melnyk, Yaroslav & Seifried, Frank Thomas, 2017. "Stochastic impulse control with regime-switching dynamics," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1024-1042.
    10. Hyoung Jun Kim & Su Jung Jee & So Young Sohn, 2021. "Cost–benefit model for multi-generational high-technology products to compare sequential innovation strategy with quality strategy," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-17, April.
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