Life cycle modeling

Generally, a product does not sell at constant level over the course of its existence in the market. Therefore, when forecasting sales, product life cycles must be carefully analyzed. Product life cycle models are used to investigate the rate at which products pass through their product life cycle.

A product's life cycle consists of different stages in the product's existence. The duration of each stage is often utilized when making short or longer strategic decisions in an organization. Depending on the product type, the entire life cycle can be a relatively short or considerably long period of time.

A product’s life cycle can be modeled using a variety of analytical methods that differ in their mathematical characteristics. A bell-shaped curve and S-shaped curve are the two emerging methods used to model life cycles in an analytical manner. In other words, there are product life cycle models developed to model each shape. In most cases, Demand Guru uses S-shaped models, which are also called growth curves.