Decision-Supporting New Product Forecasting

DeCIsIon-sUppoRTIng new pRoDUCTFoReCAsTIng By LarryLapide, ph.D. (This is an ongoing column in The Journal, which is intended to give a brief view on a potential topic of interest to practitioners of business forecasting. Suggestions on topics that you would like to see covered should be sent via e-mail to llapide@mit.edu). T T his column is written in support of this special new product forecasting issue of the Journal of Business Forecasting (JBF). My usual advice to forecasters of new product demand is to use Lifecycle Methods. I discussed these in my Spring 2001 JBF column titled, “A Simple Approach for Short Product Lifecycle Forecasting.” While I focused mainly on short-product lifecycle (one-time) products, I pointed out that the methods could be used during the launch phase of a new product to both initialize and then update its demand forecasts over time. Lifecycle Methods assume that a new product’s cumulative demand will follow an “S” shaped curve that might be similar to one or more previously launched products, often referred to as the “like” products. The new product’s forecast is determined by estimating two parameters: the “shape” ...