The article presents an editorial focusing on marketing questions relating to the introduction of new products. The author believes that in the past, there was little product choice. In the 1960s however, variety has brought up new questions for marketing personnel, namely when to enter a new product into the marketplace. He thinks that an evaluation period of about two and a half years is needed to truly get a good idea of how well a product might do in the grocery marketplace.
TIME-sharing computer systems, BUSINESS forecasting, CASE method (Teaching), BUSINESS planning, BUSINESS budgeting, COMPUTER systems, RAPID prototyping, BUDGET, ELECTRONIC data processing, TECHNOLOGICAL innovations, and INNOVATION adoption
The time-sharing computer system now being operated in Phoenix by the Computer Department offers any Company executive willing to spend a few days learning to use the system an entirely new capability to explore and prepare business forecasts. The system does the arithmetic and prints the results in the privacy of the user's office in a few minutes. The planner can explore a range of assumptions and estimates impossible to handle by manual methods and difficult and time-consuming by more traditional computer methods. With the system, the planner can state his basic data and assumptions, observe the results, and then modify any of the assumptions he chooses and get new results within a few minutes. By following this procedure several times it is possible to explore the effects of a variety of environmental assumptions, such as market and price structure for a new product, and to find out what budget of costs for the new product must be realized to yield acceptable business results. This procedure, which requires many days of the time of several individuals by manual methods, can be completed in most eases by one man in less than one day, including the initial programming. An example from a recent new business study is given. [ABSTRACT FROM AUTHOR]
NEW product development, PRODUCT management, ECONOMIC demand, DECISION making, RAPID prototyping, MATHEMATICAL models, LIFE cycle costing, RATE of return, NONLINEAR functional analysis, DYNAMIC programming, MATHEMATICAL programming, and QUANTITATIVE research
The decision to add, or to reject, or to investigate more fully a new product proposal is one of the most important problems faced by businessmen. The factors surrounding the decision can be mathematically considered by four sub-models in the areas of demand, cost, profit, and uncertainty. The demand model is structured to consider life cycle, industry, competitive and product interdependency effects, and will admit non-linear and discontinuous functions. A cost minimization model is joined to the demand model to formulate a constrained profit maximization problem. The optimization is accomplished by the use of dynamic programming. The final decision is based on the businessman's criterion in combining uncertainty and the rate of return on investment. A practical application of the model is presented to demonstrate the usefulness and problems of a quantitative approach to new product decisions. [ABSTRACT FROM AUTHOR]
The article features the author's comments on the research paper "A New Product Analysis and Decision Model." The author acknowledges the important applications of the paper for sequential decision theory in the field of management science, but expresses concern as to generalizations made in the text. It is suggested that the demand function component of the mathematical analysis discussed in the paper. The author proposes that the functional analysis overlooks some main difficulties associated with the featured decision making variables. The industrial product development process is discussed. A heuristic programming approach is also examined.
PRODUCT lines, MATERIALS handling, INDUSTRIAL costs, BUSINESS forecasting, MARKETING research, PRICING, PRODUCT management research, INTERNATIONAL business enterprises, and RAPID prototyping
A price leader must formulate list prices every time he introduces a new product line (fairly frequently in a technologically developing industry). This is not easy. When the company is multi-national, pricing policy becomes further complicated by the issues of centralization versus autonomy of the national subsidiaries, and three pricing schemes are encountered in practice. Scheme 1. The price of an item is the same around the world, except that the customers absorb freight plus import duty. Very simple price coordination and auditing results from this policy. Scheme 2. National prices for the line equal an optimally determined national weighting factor multiplied by a set of benchmark prices. Scheme 3. The subsidiaries can take advantage of local competitive climates with no fixed requirement that prices be coordinated across the nations. For each pricing scheme the overall profit equals the model profit minus administrative costs. The three Schemes are sequenced in order of their model profits, which is also their likely administrative cost sequence. We shall compute their comparative model profitabilities so as to have bonds against which to gauge administrative costs. A base case is presupposed. Adjustments to prices and to marketing budgets induce changes in the quantity sold, and hence in the production cost. The profit function is approximated as quadratic in the control variables of price and marketing budget, so that optimal adjustments can be calculated by little more than inverting a partitioned matrix. [ABSTRACT FROM AUTHOR]
NEW product development, TRAINING of executives, CONCEPTS, INDUSTRIAL design, INDUSTRIAL research, RAPID prototyping, UNIVERSITIES & colleges, and ACADEMIC degrees
The article presents the author's views on the need of efficient training for the product development managers to overcome the challenges in new product development in the future. According to the author the increase of the new product failure rate is mainly due to inefficient training of those people who are responsible for the creation of new products, services, or concepts. He suggests the concept of a "superstar" on the corporate staff--an individual trained in industrial design, marketing, and engineering and technology. The author encourages the universities to offer courses and mechanics to begin master's degree program in new product development that would include all the required elements integrated in new product development.
TECHNOLOGICAL innovations management, ORGANIZATIONAL structure, INDUSTRIAL productivity, VERTICAL integration, DECENTRALIZATION in management, DECISION making, INNOVATION management, BUSINESS size, TECHNOLOGY transfer management, RAPID prototyping, and INNOVATION adoption
After briefly reviewing studies of the impact of operations technology on organization, a model of the relationship between mass-output orientation of manufacturing technology and three organizational variables-vertical integration, decentralization in top-level decision making, and the use of sophisticated controls-is developed. Data for 79 manufacturing firms support the model. When the sample is broken down into high-profit and low-profit subsamples that otherwise are comparable, it is found that the data for the high-profit subsample support the model substantially more strongly than the data for the low-profit subsample. Following data analysis, an expanded model is outlined which incorporates the effect that organizational size may have on structural variates. The determinants of technology, as well as alternative or additional structural adaptations to technology, are assessed. [ABSTRACT FROM AUTHOR]
Journal of the American Statistical Association; Sep74, Vol. 69 Issue 347, p665, 7p
MANUFACTURING processes, STATISTICAL sampling, RAPID prototyping, MANUFACTURING execution systems, PRODUCTION engineering, and FACTORIES
A decision-theoretic approach is used to derive a variables sampling plan applicable to finite lots. A sampling distribution is derived for a general manufacturing process, and one-sided acceptance regions are determined for the particular cases in which the manufacturing process is described by either a normal distribution or an exponential distribution. Comparisons show that for a given risk level, a substantial savings in sample sizes can be effected over those required by previously available procedures (hypergeometric plans or variables plans with an infinite lot assumption). [ABSTRACT FROM AUTHOR]
International Journal of Production Research; Jan1975, Vol. 13 Issue 1, p99, 4p, 1 Chart
BUSINESS enterprises, MANUFACTURES, MANUFACTURING processes, RAPID prototyping, PRODUCTION methods, INDUSTRIAL engineering, and PRODUCTION engineering
Inter-firm comparative studies are widely used for a variety of purposes. They depend on close definition of data so that information from one firm is directly comparable with that from another. Ensuring comparability is not always easy and this note outlines a technique which researchers may find useful in validating data relating to firms' manufacturing processes. [ABSTRACT FROM AUTHOR]