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Modelling high-tech product life cycles with short-term demand information: a case study

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  • B Aytac

    (Lehigh University)

  • S D Wu

    (Lehigh University)

Abstract

Increasing competition and volatile conditions in high-tech markets result in shortening product life cycles with non-cyclic demand patterns. This study illustrates the use of a demand-characterisation approach that models the underlying shape of product demands in these markets. In the approach, a Bayesian-update procedure combines the demand projections obtained from historical data with the short-term demand information provided from demand leading indicators. The goal of the Bayesian procedure is to improve the accuracy and reduce the variation of historical data-based demand projections. This paper discusses the implementation experience of the proposed approach at a semiconductor-manufacturing company; the key test results are presented using product families introduced over the last few years with a comparison to real-world benchmark demand forecasts.

Suggested Citation

  • B Aytac & S D Wu, 2011. "Modelling high-tech product life cycles with short-term demand information: a case study," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(3), pages 425-432, March.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:3:d:10.1057_jors.2010.89
    DOI: 10.1057/jors.2010.89
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    References listed on IDEAS

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    Cited by:

    1. Dennis Heffley, 2016. "Revisiting the Product Life Cycle," Working papers 2016-36, University of Connecticut, Department of Economics.
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    3. Chihyun Jung & Dae-Eun Lim, 2016. "Development of an Adaptive Forecasting System: A Case Study of a PC Manufacturer in South Korea," Sustainability, MDPI, vol. 8(3), pages 1-12, March.
    4. J. B. G. Frenk & Canan Pehlivan & Semih O. Sezer, 2019. "Order and exit decisions under non-increasing price curves for products with short life cycles," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 90(3), pages 365-397, December.

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