Coordinating new product development and delivery

The problem of quoting an optimal new product delivery time is examined. The market costs/benefits derived from the product delivery as well as the costs associated with the product development project are explicitly included in a cost model. The duration of the product’s marketable life is assumed to be distributed as a random variable of phase type. Demand for the product is assumed to occur according to a nonhomogeneous Poisson process. Simple solutions for the problem are identified for the special case of a homogeneous Poisson process.