Quotation Reiner, Gerald, Natter, Martin, Drechsler, Wenzel. 2009. Life cycle profit - reducing supply risks by integrated demand management. Technology Analysis & Strategic Management. 21 (5), 653-664.




Technology advances and competitive pressure have shortened the life cycles for many products and drastically increased the penalty of holding obsolete finished goods inventories. Standard planning methods lead to high forecasting errors and – as a consequence – to high safety inventories. Furthermore, these traditional inventory models typically assume that demand is stationary. However, in industries with very short product life cycles like the mobile phone industry the assumption of stationary demand is not appropriate. Since, an appropriate service level is of major interest we propose a new model with stochastic elements (demand) in order to investigate optimal service levels. In particular, we calibrate a system dynamics model for the integrated analysis of alternative pricing strategies and their effects on the service level. Hence, we can show how our model supports the identification of the best service level in terms of customer satisfaction and life cycle profit. Furthermore, we introduce a new approach in system dynamics modelling to ensure external validity of our model.


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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Technology Analysis & Strategic Management
Citation Index SSCI
WU-Journal-Rating new STRAT-C, VW-D
Language English
Title Life cycle profit - reducing supply risks by integrated demand management
Volume 21
Number 5
Year 2009
Page from 653
Page to 664
Reviewed? Y
DOI http://dx.doi.org/10.1080/09537320902969190
Open Access N


Reiner, Gerald (Details)
Drechsler, Wenzel (University of Frankfurt, Germany)
Natter, Martin (University of Frankfurt, Germany)
Research areas (ÖSTAT Classification 'Statistik Austria')
1133 Computer-aided simulation (Details)
5307 Business and management economics (Details)
5316 Industrial management (Details)
5326 Production research (Details)
5354 Business logistics (Details)
5365 Quality management (Details)
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