Question

(Please provide references for answers)

Q7. Products only have a certain life span. Some products are nowadays already ‘old’ before they are broken. (e.g. mobile phones). The course from new to old from a product is called a ‘product life cycle’. (10 + 10 = 20 Marks)

a. Draw, in a graph the product life cycle of a random product and give the names of the different phases in the product life cycle.

b. Give reason why, from a logistic point of view, an introduction of a product can be very difficult.

(Please provide references for answers)

Answer 1

Answer 7a= Product life cycle can be seen as the different phases through which a certain product passes from its introduction to the decline. Similar to the life of human being, the product also has a phase-wise life and it passes through 4 different stages which are Introduction, Growth, Maturity, and Decline

The typical example of the product life cycle of Black and White Television is shown in figure=

Introduction= This is the phase in which the B/W TV was launched. There was no competition in the market but yet the producers have to spend a lot of money on the advertising of the product. The demand for the product increased slowly and the price of the product was also high

Growth= At this stage, the demand for B/W TV increased rapidly and there were many companies that started to offer this product, and thus the competition in the market increased. The companies had to spend a lot of money on promotional activities. The product also started to be available at different locations

Maturity= By this stage, the demand for the product became saturated and there was a lot of competition in the market. Product improvements and innovative products were also launched in the market.

Decline= By this time, the product demand declined rapidly and the aim of the producers was to earn as much revenue as possible before abandoning the product.

Answer 7b= The introduction phase is quite difficult from the point of view of logistics operations as the company has to decide the intensity of distribution. This needs to predict the expected demand for the product depending on which the quantity of the product can be availed as the different stores or distribution points. At the same time, there is no earlier infrastructure for the product so a lot of efforts and funds have to be diverted towards this direction. Selection of distribution members, more of transportation, frequency, and intensity of transportation all these decisions are to be made that makes this stage quite difficult.

references=

V. Misra, M.I. Kahn, U.K. Singh, Supply Chain Management Systems: Architecture,

Kurkin, Ondřej; Januška, Marlin (2010). "Product Life Cycle