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Managing Product Rollovers
Author(s) -
Koca Eylem,
Souza Gilvan C.,
Druehl Cheryl T.
Publication year - 2010
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.2010.00270.x
Subject(s) - rollover (web design) , dual (grammatical number) , product (mathematics) , reservation , operations research , path (computing) , microeconomics , new product development , computer science , business , industrial organization , operations management , economics , marketing , mathematics , art , computer network , geometry , literature , world wide web , programming language
We study the product rollover strategy decision, where a firm decides whether to phase out an old generation of a product to be replaced by a new with either a dual or single roll. Our model considers a final build of the old product and preannouncement of the new, and incorporates dynamic pricing and inventory decisions. We find that the optimal price path closely follows changes in reservation price curves for the two products over time. We also identify the drivers of the rollover strategy decision, finding that lower market risk (faster diffusion, higher market responsiveness to preannouncements) and higher performance improvement for the new generation are associated with the single roll strategy.