A profit-oriented approach for selection of new product scheme

Xinggang Luo; Yan Cao; Chun Kit Kwong; Jiafu Tang

doi:10.1109/CCDC.2012.6244288

A profit-oriented approach for selection of new product scheme

Xinggang Luo
, Yan Cao
, Chun Kit Kwong
, Jiafu Tang

Research output: Chapter in book / Conference proceeding › Conference article published in proceeding or book › Academic research › peer-review

Abstract

The multinomial logit (MNL) consumer choice rules employed in the extant product design research assume that a product always has a market share even though the product has a very low utility value. In this paper, a new consumer choice rule integrating the dollar-scaled utility with piecewise logit function is proposed to avoid estimation bias caused by this problem. A profit maximizing model under the proposed rule is established in a multi-segment product market. It has been proven that in an unpartitioned product market, a local optimal solution of the model is also a global optimal solution, and hence standard nonlinear programming algorithms can be applied. An algorithm based on interval analysis is developed to solve the model under a multi-segment market. Finally, an example of selection of new product scheme is given to illustrate the feasibility and effectiveness of the proposed model and algorithm.

Original language	English
Title of host publication	Proceedings of the 2012 24th Chinese Control and Decision Conference, CCDC 2012
Pages	1793-1798
Number of pages	6
DOIs	https://doi.org/10.1109/CCDC.2012.6244288
Publication status	Published - 1 Oct 2012
Event	2012 24th Chinese Control and Decision Conference, CCDC 2012 - Taiyuan, China Duration: 23 May 2012 → 25 May 2012

Conference

Conference	2012 24th Chinese Control and Decision Conference, CCDC 2012
Country/Territory	China
City	Taiyuan
Period	23/05/12 → 25/05/12

Keywords

consumer choice rule
new product development
product design
product positioning

ASJC Scopus subject areas

Information Systems and Management
Control and Systems Engineering

More information

10.1109/CCDC.2012.6244288

Cite this

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title = "A profit-oriented approach for selection of new product scheme",

abstract = "The multinomial logit (MNL) consumer choice rules employed in the extant product design research assume that a product always has a market share even though the product has a very low utility value. In this paper, a new consumer choice rule integrating the dollar-scaled utility with piecewise logit function is proposed to avoid estimation bias caused by this problem. A profit maximizing model under the proposed rule is established in a multi-segment product market. It has been proven that in an unpartitioned product market, a local optimal solution of the model is also a global optimal solution, and hence standard nonlinear programming algorithms can be applied. An algorithm based on interval analysis is developed to solve the model under a multi-segment market. Finally, an example of selection of new product scheme is given to illustrate the feasibility and effectiveness of the proposed model and algorithm.",

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author = "Xinggang Luo and Yan Cao and Kwong, \{Chun Kit\} and Jiafu Tang",

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doi = "10.1109/CCDC.2012.6244288",

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A profit-oriented approach for selection of new product scheme. / Luo, Xinggang; Cao, Yan; Kwong, Chun Kit et al.
Proceedings of the 2012 24th Chinese Control and Decision Conference, CCDC 2012. 2012. p. 1793-1798 6244288.

Research output: Chapter in book / Conference proceeding › Conference article published in proceeding or book › Academic research › peer-review

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M3 - Conference article published in proceeding or book

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A profit-oriented approach for selection of new product scheme

Abstract

Conference

Keywords

ASJC Scopus subject areas

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