New Product Decisions Information Discounting And Product Selection

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New Product Decisions Information Discounting And Product Selection
Glen L Urban
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) PCS Iz ) = ^-r^^ — ^ i' j^ EP(Z. | S. ). P(S. ) i -' """ The sequence to be selected would be the one which has the highest expected value of utility. This Bayesian approach is highly attractive on a theoretical basis, but there are a number of problems that preclude its use in practical prob- lems. The first problem concerns the inputs necessary to analyze a sequence. In the new product network, each study may be concerned with a different aspect of the product, such as cost, demand, or comp...etition. To use the fixed mode these heterogeneous experiments must be aggregated into one equivalent study. This aggregation may present problems. For example, the aggregate test results (Z. ) may be difficult to specify since each sub-experiment produces completely different magnitudes and units of results. Similar problems are confronted when conditional probabilities P(Z. |S. ) are to be estimated, since this value must represent one over- all conditional probability of observing Z_. For the aggregated sequence when each study is directed at a different new product characteristic.

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