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Mitigating Hi-tech products risks due to rapid technological innovation

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  • Yang, P.C.
  • Wee, H.M.
  • Liu, B.S.
  • Fong, O.K.

Abstract

The risks on international trade have increased continuously in recent years. One such risk for Hi-tech products is the result of rapid technological innovation, which results in a significant decline in the component cost, the selling price and the demand (due to newer products introduction). The Hi-tech products include computers and communication consumer products. From a practical viewpoint, there is a need to develop an innovative replenishing policy to consider the impact of the risk. In this paper, an economic order quantity model with finite planning horizon is developed for a buyer, when the component cost, the selling price and the demand rate of the end-consumer decline at a continuous rate. A numerical example and sensitivity analysis for two case studies are carried out to illustrate this model.

Suggested Citation

  • Yang, P.C. & Wee, H.M. & Liu, B.S. & Fong, O.K., 2011. "Mitigating Hi-tech products risks due to rapid technological innovation," Omega, Elsevier, vol. 39(4), pages 456-463, August.
    • Handle: RePEc:eee:jomega:v:39:y:2011:i:4:p:456-463
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    References listed on IDEAS

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