The paper aims to sketch a dynamic model in order to support decisions for the allocation of financial (i.e. cash flow provided by current sales) and human resources to Marketing and R&D policies, in order to better manage "product portfolio" and new products launching in an industrial firm. The working hypothesis from which the paper stems is to consider that the strategic control for launching new products and monitoring the path of the old ones along their life-cycles is not only possible through the use of accounting models, but also through dynamic models. Both kind of models indeed can be useful in "product portfolio" management; however, each of them may better satisfy different purposes. More particularly, accounting models (i.e.: those which are mainly based on General Ledger data) may better support some cognitive purpose regarding the management of each product separately without taking in "account" the interrelation influence between new and old products. On the other hand, the use of dynamic model, which is mainly based on non-accounting data, may particularly enable to: improve management learning of the system (as a whole) to be handled; implement a strategic control sub-system of resource allocation to product, drawing more on mental models, personal, personal experience and intuition of the entrepreneur and of management than on accounting data; improve an inter-functional and inter-divisional approach and so a better understanding of trade-off among financial, marketing, production, R&D subsystems and though decisions on "product portfolio" management; point out the different levers on which management may act and evaluate the different effects they may produce in the short and in the long term, so to assess the several possible consequences of managerial decision on the product life-cycle; better evaluate the medium/long term effects of product discretionary costs (Advertising, R&D, Education, etc.) on product cash flows. This may lead to a more integrated monitoring and understanding of the paths that different products may run along their cycle. The above said working hypothesis will empirically be tested in a medium-sized wine producer firm.

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Date created

• 1995

Type

• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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12420ec6bd5f758d2b4dea59aabd75a9

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23d738ba88f8333bc39725f9cb5bd0b8

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b83f2ce2912343b559f967dd985da515

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Collection

System Dynamic Society Records

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Collecting area

• This collection is part of the University Archives