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        Decision Model Development under Different Scenarios for New Product Development

        Thanyatorn Fongsatitkul,Yasutaka Kainuma 대한산업공학회 2020 Industrial Engineeering & Management Systems Vol.19 No.3

        Under a highly competitive market, companies have to develop a new product as an effective strategy to maintain or even enhance their market shares. New product development (NPD) with an involvement of environmental dimension, nowadays, is one of the most crucial factors for business success. A feasibility study and a milestone of the NPD project have to be systematically established and subsequently evaluated. A Bayesian decision analysis was then employed to deal with three uncertainties of the future market shares with or without an environmental-friendly component and the competitors’ responses, producing expected values and variances for three uncertainties. An application of a decision model using MATLAB can be an effective tool to identify whether or not the NPD project under different scenarios should be continued in terms of future expected profits. Four scenarios were explored: Business as usual (BAU), improvements with or without an involvement of environmental aspects, and project termination. Moreover, three uncertainties were also considered: market status (future conventional market share and environmentallyfriendly market share), and competitors’ reactions. Sensitivity analysis of the selected scenario/model under three uncertainties was finally established to identify the effects of change in the uncertainties as the input parameters with respect to the output profit.

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