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An Inventory Model for New Product When Demand Follows Dynamic Innovation Process having Dynamic Potential Market Size

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  • K. K. Aggarwal

    (Department of Operational Research, University of Delhi, Delhi, India)

  • Alok Kumar

    (Department of Operational Research, University of Delhi, Delhi, India)

Abstract

In this era of globalization and constant innovation the life cycles of the products are diminishing which tends to dynamic behaviour of the system and because of this there is a constant introduction of new products in the market. Therefore, while developing inventory models for new products, it becomes necessary to consider dynamic parameters associated with the demand function and are responsible for making the system dynamic which are essential for economic ordering policies for such products. In this paper an economic order quantity model has been developed in which the demand is time dependent and innovation driven. The parameters such as coefficient of innovation and potential market size associated with the demand function have been considered as dynamic over time to match with the real feature of the system. The model is illustrated with a numerical example and a comprehensive sensitivity analysis of the optimal solution with respect to different parameters has been performed to know the utility of the model.

Suggested Citation

  • K. K. Aggarwal & Alok Kumar, 2012. "An Inventory Model for New Product When Demand Follows Dynamic Innovation Process having Dynamic Potential Market Size," International Journal of Strategic Decision Sciences (IJSDS), IGI Global, vol. 3(4), pages 78-99, October.
    • Handle: RePEc:igg:jsds00:v:3:y:2012:i:4:p:78-99
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    File URL: http://services.igi-global.com/resolvedoi/resolve.aspx?doi=10.4018/jsds.2012100105
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    Cited by:

    1. Ping-Lung Huang & Bruce C.Y. Lee & Chen-Song Wang & Chi-Te Sun, 2017. "Relative Importance of the Factors under the ISO-10015 Quality Management Guidelines that Influence the Service Quality of Certification Bodies," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 13(1), pages 105-137, February.
    2. Udayan Chanda & Alok Kumar, 2019. "Optimization of EOQ Model for New Products Under Multi-Stage Adoption Process," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-25, April.

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