IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v294y2021i2p507-524.html
   My bibliography  Save this article

Optimal sales and production rollover strategies under capacity constraints

Author

Listed:
  • Schwarz, Justus Arne
  • Tan, Barış

Abstract

Firms regularly replace their old product generation by a newer generation to sustain and increase their market share and profit. The product rollover problem of deciding on the number of old products to be pre-produced before the introduction of the new generation, and then deciding on the prices, sales volumes, and production volumes of the old and the new generation during the introduction under capacity constraint is considered.

Suggested Citation

  • Schwarz, Justus Arne & Tan, Barış, 2021. "Optimal sales and production rollover strategies under capacity constraints," European Journal of Operational Research, Elsevier, vol. 294(2), pages 507-524.
    • Handle: RePEc:eee:ejores:v:294:y:2021:i:2:p:507-524
    DOI: 10.1016/j.ejor.2021.01.040
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221721000709
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2021.01.040?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daniel A. Levinthal & Devavrat Purohit, 1989. "Durable Goods and Product Obsolescence," Marketing Science, INFORMS, vol. 8(1), pages 35-56.
    2. Zhou, Erfeng & Zhang, Juzhi & Gou, Qinglong & Liang, Liang, 2015. "A two period pricing model for new fashion style launching strategy," International Journal of Production Economics, Elsevier, vol. 160(C), pages 144-156.
    3. Lim, Wei Shi & Tang, Christopher S., 2006. "Optimal product rollover strategies," European Journal of Operational Research, Elsevier, vol. 174(2), pages 905-922, October.
    4. Sunil Kumar & Jayashankar M. Swaminathan, 2003. "Diffusion of Innovations Under Supply Constraints," Operations Research, INFORMS, vol. 51(6), pages 866-879, December.
    5. 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.
    6. Chao Liang & Metin Çakanyıldırım & Suresh P. Sethi, 2014. "Analysis of Product Rollover Strategies in the Presence of Strategic Customers," Management Science, INFORMS, vol. 60(4), pages 1033-1056, April.
    7. Liu, Jingchen & Zhai, Xin & Chen, Lihua, 2019. "Optimal pricing strategy under trade-in program in the presence of strategic consumers," Omega, Elsevier, vol. 84(C), pages 1-17.
    8. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    9. Dipak Jain & Vijay Mahajan & Eitan Muller, 1991. "Innovation Diffusion in the Presence of Supply Restrictions," Marketing Science, INFORMS, vol. 10(1), pages 83-90.
    10. Ankit Bansal & Reha Uzsoy & Karl Kempf, 2020. "Iterative combinatorial auctions for managing product transitions in semiconductor manufacturing," IISE Transactions, Taylor & Francis Journals, vol. 52(4), pages 413-431, April.
    11. Teck-Hua Ho & Sergei Savin & Christian Terwiesch, 2002. "Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint," Management Science, INFORMS, vol. 48(2), pages 187-206, February.
    12. K. Sridhar Moorthy, 1988. "Product and Price Competition in a Duopoly," Marketing Science, INFORMS, vol. 7(2), pages 141-168.
    13. Lynn O. Wilson & John A. Norton, 1989. "Optimal Entry Timing for a Product Line Extension," Marketing Science, INFORMS, vol. 8(1), pages 1-17.
    14. Liu, Jingchen & Zhai, Xin & Chen, Lihua, 2018. "The interaction between product rollover strategy and pricing scheme," International Journal of Production Economics, Elsevier, vol. 201(C), pages 116-135.
    15. Özlem Bilginer & Feryal Erhun, 2015. "Production and Sales Planning in Capacitated New Product Introductions," Production and Operations Management, Production and Operations Management Society, vol. 24(1), pages 42-53, January.
    16. Wenjing Shen & Izak Duenyas & Roman Kapuscinski, 2011. "New Product Diffusion Decisions Under Supply Constraints," Management Science, INFORMS, vol. 57(10), pages 1802-1810, October.
    17. Wenjing Shen & Izak Duenyas & Roman Kapuscinski, 2014. "Optimal Pricing, Production, and Inventory for New Product Diffusion Under Supply Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 28-45, February.
    18. Hongmin Li & Stephen C. Graves & Woonghee Tim Huh, 2014. "Optimal Capacity Conversion for Product Transitions Under High Service Requirements," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 46-60, February.
    19. Teck-Hua Ho & Sergei Savin & Christian Terwiesch, 2011. "Note: A Reply to "New Product Diffusion Decisions Under Supply Constraints"," Management Science, INFORMS, vol. 57(10), pages 1811-1812, October.
    20. Fernando Bernstein & Victor Martínez-de-Albéniz, 2017. "Dynamic Product Rotation in the Presence of Strategic Customers," Management Science, INFORMS, vol. 63(7), pages 2092-2107, July.
    21. Negahban, Ashkan & Smith, Jeffrey S., 2018. "Optimal production-sales policies and entry time for successive generations of new products," International Journal of Production Economics, Elsevier, vol. 199(C), pages 220-232.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krishnan, Trichy V. & Feng, Shanfei & Jain, Dipak C., 2023. "Peak sales time prediction in new product sales: Can a product manager rely on it?," Journal of Business Research, Elsevier, vol. 165(C).
    2. Wang, Zhanpeng & Ye, Chao & Liu, Xinxin & Ma, Ruize & Sun, Zilai & Ruan, Junhu, 2023. "Optimal retail sales strategies for old and new products in monopoly and horizontal competition scenarios," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    3. Jing, Fei & Lin, Jun & Zhang, Qiao & Qian, Yanjun, 2022. "New technology introduction and product rollover strategies," European Journal of Operational Research, Elsevier, vol. 302(1), pages 324-336.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bin Hu & Zhankun Sun, 2022. "Managing Self-Replicating Innovative Goods," Management Science, INFORMS, vol. 68(1), pages 399-419, January.
    2. Wu, Cheng-Han & Lai, Jing-Yi, 2019. "Dynamic pricing and competitive time-to-market strategy of new product launch under a multistage duopoly," European Journal of Operational Research, Elsevier, vol. 277(1), pages 138-152.
    3. Ghobadi, Somayeh Najafi- & Bagherinejad, Jafar & Taleizadeh, Ata Allah, 2021. "A two-generation new product model by considering forward-looking customers: Dynamic pricing and advertising optimization," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    4. Negahban, Ashkan & Smith, Jeffrey S., 2018. "Optimal production-sales policies and entry time for successive generations of new products," International Journal of Production Economics, Elsevier, vol. 199(C), pages 220-232.
    5. Ashkan Negahban & Jeffrey S. Smith, 2018. "A joint analysis of production and seeding strategies for new products: an agent-based simulation approach," Annals of Operations Research, Springer, vol. 268(1), pages 41-62, September.
    6. A. Negahban & J.S. Smith, 2016. "The effect of supply and demand uncertainties on the optimal production and sales plans for new products," International Journal of Production Research, Taylor & Francis Journals, vol. 54(13), pages 3852-3869, July.
    7. Wenjing Shen & Izak Duenyas & Roman Kapuscinski, 2014. "Optimal Pricing, Production, and Inventory for New Product Diffusion Under Supply Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 16(1), pages 28-45, February.
    8. Esma Koca & Tommaso Valletti & Wolfram Wiesemann, 2021. "Designing Digital Rollovers: Managing Perceived Obsolescence through Release Times," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3698-3712, October.
    9. Liu, Jingchen & Zhai, Xin & Chen, Lihua, 2018. "The interaction between product rollover strategy and pricing scheme," International Journal of Production Economics, Elsevier, vol. 201(C), pages 116-135.
    10. Negahban, Ashkan & Dehghanimohammadabadi, Mohammad, 2018. "Optimizing the supply chain configuration and production-sales policies for new products over multiple planning horizons," International Journal of Production Economics, Elsevier, vol. 196(C), pages 150-162.
    11. Eryn Juan He & Joel Goh, 2022. "Profit or Growth? Dynamic Order Allocation in a Hybrid Workforce," Management Science, INFORMS, vol. 68(8), pages 5891-5906, August.
    12. Yunke Mai & Bin Hu, 2023. "Optimizing Free-to-Play Multiplayer Games with Premium Subscription," Management Science, INFORMS, vol. 69(6), pages 3437-3456, June.
    13. Xue, Yu & Caliskan-Demirag, Ozgun & Chen, Youhua (Frank) & Yu, Yugang, 2018. "Supporting customers to sell used goods: Profitability and environmental implications," International Journal of Production Economics, Elsevier, vol. 206(C), pages 220-232.
    14. Liu, Jingchen & Zhai, Xin & Chen, Lihua, 2019. "Optimal pricing strategy under trade-in program in the presence of strategic consumers," Omega, Elsevier, vol. 84(C), pages 1-17.
    15. Jing, Fei & Lin, Jun & Zhang, Qiao & Qian, Yanjun, 2022. "New technology introduction and product rollover strategies," European Journal of Operational Research, Elsevier, vol. 302(1), pages 324-336.
    16. Vahideh Manshadi & Sidhant Misra & Scott Rodilitz, 2020. "Diffusion in Random Networks: Impact of Degree Distribution," Operations Research, INFORMS, vol. 68(6), pages 1722-1741, November.
    17. Il-Horn Hann & JooHee Oh, 2017. "Combating Prerelease Piracy: Modeling the Effects of Antipiracy Measures in P2P Networks," INFORMS Journal on Computing, INFORMS, vol. 29(1), pages 92-107, February.
    18. Bhatia, Nishika & Gülpınar, Nalan & Aydın, Nurşen, 2020. "Dynamic production-pricing strategies for multi-generation products under uncertainty," International Journal of Production Economics, Elsevier, vol. 230(C).
    19. Chih-yi Chi, Woody & Wu, Shufen, 2006. "Intertemporal quality discrimination of a durable good monopolist," Economics Letters, Elsevier, vol. 92(2), pages 184-191, August.
    20. Amini, Mehdi & Wakolbinger, Tina & Racer, Michael & Nejad, Mohammad G., 2012. "Alternative supply chain production–sales policies for new product diffusion: An agent-based modeling and simulation approach," European Journal of Operational Research, Elsevier, vol. 216(2), pages 301-311.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:294:y:2021:i:2:p:507-524. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.