Optimal product release time for a new high-tech startup firm under technical uncertainty
Author(s) -
Ming-hui Wang,
Nanjing Huang,
Donal O’Regan
Publication year - 2021
Publication title -
journal of industrial and management optimization
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.325
H-Index - 32
eISSN - 1553-166X
pISSN - 1547-5816
DOI - 10.3934/jimo.2021186
Subject(s) - product (mathematics) , new product development , computer science , dynamic programming , economics , high tech , mathematical optimization , microeconomics , operations research , business , mathematics , marketing , algorithm , geometry , political science , law
Decision makers of new high-tech startup firms always want to choose an optimal time to launch their products which are under research and development (R&D) to obtain the maximum net income of these firms. However, existing models fail to consider the optimal release time of products for these new high-tech startup firms. In this paper, the optimal time to launch the product of the R&D project is assumed to be the first time when the product of the R&D project is released to the market. Based on this assumption, we develop a continuous-time model to find the optimal time at which the startup firm launches its product of the R&D project by considering the price of the similar product. Employing the methods of dynamic programming and variational inequalities, we also provide a closed form solution to our model. We also find that these high-tech startup firms prefer to delay their product release time when the price of the similar product is at a phase of rapid growth or the price has considerable uncertainty. Moreover, some numerical examples are provided to investigate the properties of our model.
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