The Optimal Placement of the Manufacture Lines for New Products: An Econometric Approach
In most cases, the process of the new product takes places inside the companies in the production lines it disposes of, together with the production flow of the already existing products from the market. This happens especially in the situation of new products that represent improvements of the already existing products (the shampoo with a greater washing capacity, the hamburger with a double quantity of meat, double filtered cigarettes).
There are also situations when the make of the new products need a new placement, different from that owned by the company. This is valid in at least two situations:
- The society decides to diversify the products’ catalogue by realizing new products, completely different from that already exist;
- The society does not enrich its products’ catalogue, but it decided to penetrate new sale markets with its products. In this case, the products of the company represent new products for that market.
By placement, we understand the place, terrain where one can realize a technological line (in this case to make new products). The connection between the placement and the subsequent production activity is biunique. On one hand, the production activity and the used technology modify (sometimes fundamentally) the natural background, and on the other hand the placement offers more or less value to the subsequent production activity.
The choice of the placement strongly contributes to the economical efficacy of the making line and to the success or failure of the new product on the market. For example, the placement far from the raw materials providers means supplementary exploitation expenses; the placement of a commercial center of a certain profile in an area where the population is not interested to consume those products will determine a decrease of the sales volume.
Keywords: Optimal Placement, New Product Development, Economic Efficiency, Econometric Methods, Investment
Senior Lecturer PhD, Economic Efficiency Department, Academy of Economic Studies from Bucharest