Investing in Product Development and Production Capabilities: The Crucial Linkage between Time-to-Market and Ramp-Up Time
Department
Management and Entrepreneurship
Document Type
Article
Publication Date
2006
Abstract
Shorter product life cycles, more rapid product obsolescence, and the increasing intensity of global competition have driven firms to strive for a more rapid introduction of new products to market. We introduce a normative model which yields insights concerning several key new product development (NPD) decisions. First, we examine investment strategies related to the timing and duration for investments in both design and process capacity over a given planning horizon. Second, the model offers guidance regarding the optimal time-to-market and ramp-up time necessary to meet peak demand for the new product. The model thus provides both theoretical and managerial insights into the crucial linkage between time-to-market and ramp-up time decisions. Finally, the implications of several specific NPD investment mechanisms on these NPD metrics are explored.
Journal Title
European Journal of Operational Research
Journal ISSN
0377-2217
Volume
171
Issue
2
First Page
536
Last Page
556
Digital Object Identifier (DOI)
10.1016/j.ejor.2004.08.040