Integrating efforts for product development and market penetration

This study develops a decision model to explore an innovative firm’s budget allocation problem, which needs to be solved for each s uccessive generation of a product. The firm introduces the product to the market through a distributor while aiming to maximize the market potential. This goal can be achieved by investing in R&D and increasing availability using subsidies registered to the distributor. We analyze the problem using a game theoretical model and provide a guideline for the funding strategy. We characterize the optimal budget allocation decision by two budget thresholds and a threshold on the cost efficiency of R&D and provide valuable managerial insights on when and how to prioritize the two components of the budget.

Ece Zeliha Demirci is an Assistant Professor at TED University, Department of Industrial Engineering. Prior to her current position, she was a Postdoctoral Researcher at the Industrial Engineering and Innovation Sciences Department of Eindhoven University of Technology between November 2016 and August 2019. She received her Ph.D. degree from Industrial Engineering Department of Bilkent University, in 2016. She earned her B.S. and M.S. degrees from the same department in 2007 and 2009, respectively. Her research interests include supply chain management, sustainable operations, inventory theory, and spare parts planning.

Friday, December 29, 2023, 4:00 pm
IE03 Halim Doğrusöz Auditorium