Time-to-market and product performance trade-off.

Abstract

New product development (NPD) is the engine of renewal in any organization. The profitability, and even the survival, of organizations depends on the number and quality of new products introduced into the market. However, the process of developing new products (and estimating the proper timing for their introduction into the market) remains a rich topic for research and investigation within the product development community as it lies at the intersection of the engineering and marketing disciplines. A unifying model that brings both engineering and marketing concerns together is necessary to bridge the gap between both disciplines. In this thesis, a mathematical model is introduced to study the trade-off between the product performance and the time-to-market for different product development (PD) scenarios. These scenarios vary in the three main aspects related to product characteristics: the product complexity, the product newness and the degree of supplier’s involvement. The model aims to maximize the revenue of the firm over a limited marketing window. The optimal solution reveals interesting managerial insights regarding the time that must be spent on “system design phase” and the “detailed design phase” for each product development (PD) scenario.