| Peer-Reviewed

An Optimal Exiting Time for Old Generation Product in Supply Chain

Received: 12 February 2019     Accepted: 25 March 2019     Published: 18 April 2019
Views:       Downloads:
Abstract

(I) Brief problem description: With technology developing, many series products which have several generations appear in one market. The sales of new and old generations of a product in one market influences each other. (II) The study aim: In order to help the supply chain to obtain more benefits, this paper makes a study on the exiting of old generation products. (III) Method: Based on Fisher model and multi-generation product diffusion model, this paper establishes an optimal decision-making model for the exiting time of old generation product, and analyzes the relationship between the optimal exiting time of the old generation product and the technical level of the new generation product. (IV) Result and conclusion: Observations from this study include (1) when the profit of the new generation product sold only and that of the two generations sold simultaneously are the same, it is the optimal time for old generation product to exit market, and (2) the higher the technical level of new generation product is, the earlier old generation product will exit from market, and the more profit supply chain will get. (V) Significance: The research result will help some company make optimal decision-making for the exiting time of old generation product, and get more profit.

Published in American Journal of Operations Management and Information Systems (Volume 4, Issue 1)
DOI 10.11648/j.ajomis.20190401.12
Page(s) 16-25
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Optimal Decision, Multi-generation Product, Product Exit, Exiting Time

References
[1] Bass Frank M. A New Growth for Model Consumer Durables [J]. Management Science, 1969, 15(9): 215—227.
[2] J. C. Fisher, R. H. Pry. A Simple Substitution Model of Technological Change [J]. Technological forecasting and social change, 1972: 75—88.
[3] Norton J A, Bass F M. Evolution of technological generations: The law og capture [J]. Sloan Management Review, 1992, 33(2): 66-77.
[4] Yong Luo, Fengsheng Tu. Differential Products Combination Pricing Strategy in Supply Chain [J]. International conference on services systems and services management, 2005, 1: 640—646.
[5] Seref, MMH (Seref, Michelle M. H.), Carrillo, JE (Carrillo, Janice E.); Yenipazarli, A (Yenipazarli, Arda). Multi-generation pricing and timing decisions in NP development [J] International Journal of Production Research, 2016, 54(11):1919-1937.
[6] Matsui, K (Matsui, Kenji). When and what wholesale and retail prices should be set in multi-channel supply chains? [J] European Journal of Operational Research, 2018, 267(6):540-554.
[7] Udayan Chanda, Remica Aggarwal. Optimal inventory policies for successive generations of a high technology product [J]. Journal of High Technology Management Research, 2014, 25: 148—162.
[8] Xiongwen Quan, Fengsheng Tu, Jie Wei. The stackelberg game of the price of product between manufacturers and sellers [J] System engineering theory and practice, 2007, 18(12):111-118.
[9] Gupta, MC (Gupta, Manak C.); Di Benedetto, CA (Di Benedetto, C. Anthony). Optimal pricing and advertising strategy for introducing a new business product with threat of competitive entry [J] Industrial Marketing, 2007, 36(8):540-548.
[10] Cheryl T. Druehl, Glen M. Schmidt, Gilven C. Souza. The optimal pace of product updates [J]. European journal of operational research, 2009, 192: 621—633.
[11] Luo Yong, Lou Yamin, Wang Shizhao. Stackelberg game for product renewal in supply chain [J] Discrete dynamics in nature and society, 2013.
[12] Paraskevas C. Argouslidis, George Baltas, Alexis Mavrommatis. An empirical investigation into the determinants of decision speed in product elimination decision processes [J]. European management journal, 2015, 33: 268—286.
[13] Wei Shi Lim, Christopher S. Tang. Optimal product rollover strategies [J]. European journal of operational research, 2006, 174: 905—922.
[14] De Cesare Luigi, Di Liddo Andrea. A stackelberg game of innovation diffusion: Pricing, advertising and subsidy strategies [J]. International Game Theory Review, 2001, 3(4): 325-340.
[15] Shaikh N I, Rangaswa A, Balakrishnan A. Modeling thediffusion of innovations using small-world networks [M]. CBMS Regional Conference, 2006.
[16] Zifang Lu, Ling Zeng. Competitive new product diffusion control [J]. Journal of university of posts and telecommunications of Nanjing, 2017, 37(5): 62-67.
[17] Taylor. Industrial organization theory. Beijing: China renmin university press, 1997:166-200.
[18] Shlomo Kalish. Monopolistic pricing with dynamic demand and production cost [J]. Marketing Science, 1983, 2(6): 135—159.
[19] Shizhao Wang. Research on optimal decision making of supply chain entity coordination [D]. Henan: Zhengzhou University, 2014.
Cite This Article
  • APA Style

    Yu Qi, Yong Luo. (2019). An Optimal Exiting Time for Old Generation Product in Supply Chain. American Journal of Operations Management and Information Systems, 4(1), 16-25. https://doi.org/10.11648/j.ajomis.20190401.12

    Copy | Download

    ACS Style

    Yu Qi; Yong Luo. An Optimal Exiting Time for Old Generation Product in Supply Chain. Am. J. Oper. Manag. Inf. Syst. 2019, 4(1), 16-25. doi: 10.11648/j.ajomis.20190401.12

    Copy | Download

    AMA Style

    Yu Qi, Yong Luo. An Optimal Exiting Time for Old Generation Product in Supply Chain. Am J Oper Manag Inf Syst. 2019;4(1):16-25. doi: 10.11648/j.ajomis.20190401.12

    Copy | Download

  • @article{10.11648/j.ajomis.20190401.12,
      author = {Yu Qi and Yong Luo},
      title = {An Optimal Exiting Time for Old Generation Product in Supply Chain},
      journal = {American Journal of Operations Management and Information Systems},
      volume = {4},
      number = {1},
      pages = {16-25},
      doi = {10.11648/j.ajomis.20190401.12},
      url = {https://doi.org/10.11648/j.ajomis.20190401.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajomis.20190401.12},
      abstract = {(I) Brief problem description: With technology developing, many series products which have several generations appear in one market. The sales of new and old generations of a product in one market influences each other. (II) The study aim: In order to help the supply chain to obtain more benefits, this paper makes a study on the exiting of old generation products. (III) Method:  Based on Fisher model and multi-generation product diffusion model, this paper establishes an optimal decision-making model for the exiting time of old generation product, and analyzes the relationship between the optimal exiting time of the old generation product and the technical level of the new generation product. (IV) Result and conclusion: Observations from this study include (1) when the profit of the new generation product sold only and that of the two generations sold simultaneously are the same, it is the optimal time for old generation product to exit market, and (2) the higher the technical level of new generation product is, the earlier old generation product will exit from market, and the more profit supply chain will get. (V) Significance: The research result will help some company make optimal decision-making for the exiting time of old generation product, and get more profit.},
     year = {2019}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - An Optimal Exiting Time for Old Generation Product in Supply Chain
    AU  - Yu Qi
    AU  - Yong Luo
    Y1  - 2019/04/18
    PY  - 2019
    N1  - https://doi.org/10.11648/j.ajomis.20190401.12
    DO  - 10.11648/j.ajomis.20190401.12
    T2  - American Journal of Operations Management and Information Systems
    JF  - American Journal of Operations Management and Information Systems
    JO  - American Journal of Operations Management and Information Systems
    SP  - 16
    EP  - 25
    PB  - Science Publishing Group
    SN  - 2578-8310
    UR  - https://doi.org/10.11648/j.ajomis.20190401.12
    AB  - (I) Brief problem description: With technology developing, many series products which have several generations appear in one market. The sales of new and old generations of a product in one market influences each other. (II) The study aim: In order to help the supply chain to obtain more benefits, this paper makes a study on the exiting of old generation products. (III) Method:  Based on Fisher model and multi-generation product diffusion model, this paper establishes an optimal decision-making model for the exiting time of old generation product, and analyzes the relationship between the optimal exiting time of the old generation product and the technical level of the new generation product. (IV) Result and conclusion: Observations from this study include (1) when the profit of the new generation product sold only and that of the two generations sold simultaneously are the same, it is the optimal time for old generation product to exit market, and (2) the higher the technical level of new generation product is, the earlier old generation product will exit from market, and the more profit supply chain will get. (V) Significance: The research result will help some company make optimal decision-making for the exiting time of old generation product, and get more profit.
    VL  - 4
    IS  - 1
    ER  - 

    Copy | Download

Author Information
  • Industrial Technology Research Institute, Zhengzhou University, Zhengzhou, China

  • Industrial Technology Research Institute, Zhengzhou University, Zhengzhou, China

  • Sections