Impact of Simulation in New Product Development - MIT

Modeling simulation enabled sales increasesBefore AfterProduct line coverage without 1.00 1.12simulationProduct line coverage with1.59simulationIncrease due to simulation 0.47Competitive intensity 1.00 1.90Sales without simulation (all 1.00 0.59products equally attractive)Increased sales from greater0.25product line coverage (allproducts equally attractive)Increased sales due to effectiveproduct planning0.28Simulation enabled increased sales at the field site due to• Greater product line coverage• Later feature lock, which increases effectiveness of productplanning(only part of sales increases attributable to effective productplanning can be credited to simulation)1.001.12Increased sales due toeffective product planning0.28Increased sales due togreater product linecoverage (all productsequally attractive)0.25Note: Model also takes into account overall industry salesgrowth trends.BeforeAfterSales without simulation(all products equallyattractive)0.59Sales18© 2007 Robert Laubacher 18