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Perspectives on volume prediction for new products; identifying areas of

Cedergård, Lina and Olsson, Anna (2013) MIO920
Production Management
Abstract
Before developing a new product, the future market of the identified
opportunity needs to be estimated. There is a need to evaluate the probable
future product in terms of profitability, which requires prediction of sales price,
costs and future volumes. A forecasted volume is not only basis in profitability
calculations but it also serves as an input for planning of future capacity in
terms of e.g. investments in production and resources.
Problem Description
Volumes’ context in Volvo can be interpreted as complex, due to inherent
uncertainty of the forecasted volume and its impact on future success of the
company. Given volumes importance, they are not paid that much attention
within the company. Issues related to forecasting of... (More)
Before developing a new product, the future market of the identified
opportunity needs to be estimated. There is a need to evaluate the probable
future product in terms of profitability, which requires prediction of sales price,
costs and future volumes. A forecasted volume is not only basis in profitability
calculations but it also serves as an input for planning of future capacity in
terms of e.g. investments in production and resources.
Problem Description
Volumes’ context in Volvo can be interpreted as complex, due to inherent
uncertainty of the forecasted volume and its impact on future success of the
company. Given volumes importance, they are not paid that much attention
within the company. Issues related to forecasting of volumes such as lack of a
unified structured approach are experienced.
Purpose
Identify an organisation’s ability to perform volume prediction for new
products and what to improve in that process.
Objectives
Objective A: Provide understanding of the characteristics related to volume
prediction for new products.
Objective B: Create a picture of how volume prediction for new products is
performed in an organisation.
Objective C: Specify areas of improvement.
Method
To achieve the purpose of this thesis, a case study with a normative approach
was chosen. Data was collected through a structured literature study,
examination of internal documents and by interviews with employees. In
addition, a small benchmark study was conducted in order to complement the
theoretical foundation with examples from practice.
Conclusion
Volume prediction for new products consists of complex interrelations, which
demands a holistic perspective. The analysis showed that volume prediction
within the case organisation is performed professionally on an individual level,
however lack of a common and structured process sometimes makes the
situation inefficient. There is no step of follow up in the current procedure,
which results in absence of learning opportunities and aggravates identification
of improvements. Structure and logic surrounding the generation of forecast are
neither communicated nor shared, this often results in bias and mistrust. Newto-
the-world/company products are experienced as the most difficult to forecast
due to high uncertainty and insufficient methods. Conclusively, the situation
should be improved by introducing transparency and accountability in the
current process; furthermore a step of follow up needs to be established. In
addition, a special approach should be taken towards new-to-theworld/
company products in order to address their complex nature. (Less)
Please use this url to cite or link to this publication:
author
Cedergård, Lina and Olsson, Anna
supervisor
organization
course
MIO920
year
type
M1 - University Diploma
subject
keywords
New Product Forecasting, Product Development, Product Planning, Volume Prediction, Process
other publication id
13/5441
language
English
id
3559126
date added to LUP
2013-02-28 13:12:55
date last changed
2013-02-28 13:12:55
@misc{3559126,
  abstract     = {Before developing a new product, the future market of the identified
opportunity needs to be estimated. There is a need to evaluate the probable
future product in terms of profitability, which requires prediction of sales price,
costs and future volumes. A forecasted volume is not only basis in profitability
calculations but it also serves as an input for planning of future capacity in
terms of e.g. investments in production and resources.
Problem Description
Volumes’ context in Volvo can be interpreted as complex, due to inherent
uncertainty of the forecasted volume and its impact on future success of the
company. Given volumes importance, they are not paid that much attention
within the company. Issues related to forecasting of volumes such as lack of a
unified structured approach are experienced.
Purpose
Identify an organisation’s ability to perform volume prediction for new
products and what to improve in that process.
Objectives
Objective A: Provide understanding of the characteristics related to volume
prediction for new products.
Objective B: Create a picture of how volume prediction for new products is
performed in an organisation.
Objective C: Specify areas of improvement.
Method
To achieve the purpose of this thesis, a case study with a normative approach
was chosen. Data was collected through a structured literature study,
examination of internal documents and by interviews with employees. In
addition, a small benchmark study was conducted in order to complement the
theoretical foundation with examples from practice.
Conclusion
Volume prediction for new products consists of complex interrelations, which
demands a holistic perspective. The analysis showed that volume prediction
within the case organisation is performed professionally on an individual level,
however lack of a common and structured process sometimes makes the
situation inefficient. There is no step of follow up in the current procedure,
which results in absence of learning opportunities and aggravates identification
of improvements. Structure and logic surrounding the generation of forecast are
neither communicated nor shared, this often results in bias and mistrust. Newto-
the-world/company products are experienced as the most difficult to forecast
due to high uncertainty and insufficient methods. Conclusively, the situation
should be improved by introducing transparency and accountability in the
current process; furthermore a step of follow up needs to be established. In
addition, a special approach should be taken towards new-to-theworld/
company products in order to address their complex nature.},
  author       = {Cedergård, Lina and Olsson, Anna},
  keyword      = {New Product Forecasting,Product Development,Product Planning,Volume Prediction,Process},
  language     = {eng},
  note         = {Student Paper},
  title        = {Perspectives on volume prediction for new products; identifying areas of},
  year         = {2013},
}