A Bayesian Network Decision Support System for Order Management in New Product Development

Abstract

Recently, the way firms enter to markets is influenced by the customer requirements applying product improvement. Thus, market-driven product design and development is now a favorite research topic in the literature. Order management prediction for a new product help firms to overcome the future uncertainties. Here, we propose a decision support system for customers' order management in a new product development process. The drawback of complicated decision support problems are the complexities involved in interpreting causal relationships among decision variables. Therefore, Bayesian Network (BN) has shown excellent decision support competence due to its flexible structure allowing itself to extract appropriate and robust causal relationships among target variable and related explanatory variables. We make use of a decision support BN as a prediction aid for order management in a new product development process. system predicts customer purchasing behavior using a system dynamics approach based on three pieces of information: product attractiveness, customer preferences and satisfaction, and marketing strategy. It also estimates the long-term NCLV based on Markov analysis. This can help managers to determine which product will be most lucrative to launch and the kinds of marketing strategies that should be adopted for the new product. It also helps improve new product development in the future by collating up to date information on market and product attributes. In recent years, many conventional and market-based decision support systems for product design have been developed (3-7). New product development, from idea creation to product introduction, requires inter-departmental communication among designers, engineers, and marketing personnel. These highlight the key areas that ought to be considered in making decisions on new product development, including customer requirements, customer satisfaction, market demand, product quality, product design, and pricing. However, no decision support system takes all of the key areas into account at the same time. Furthermore, to achieve a competitive edge in a market, sensible decisions must be made about various aspects of new product development, such as product attributes, customer segment, and promotion and marketing strategies.