Slide 22 of 118
Notes:
- The above graph illustrates the effect of delivering a product to market D months late.
- The non-shaded region of the demand window (triangle) signifies the lost of revenue, RL, due to late entry in the marketplace.
- In order to maximize revenues, the product must be on the market by the start of the demand window.
- If the product life cycle (length is demand window) is short, being late to market can spell disaster.
- The revenue loss equation:
- R0 refers to the expected product revenue if it were on time
- D is the delay (months) in delivering a product to market
- 2W is the length of the product life cycle(months)
- For more information, see [LIU95].
