Life Cycle Management
What is it?
All products follow a sigmoidal growth curve of:
- Establishment – low initial sales
- Growth – rapid sales growth as the product is recognised
- Maturity – flat sales
- Senescence – sales decline as competitors and new products replace
Inventory planning must take this into account to prevent out of stocks initially and overstocks / redundant stock as sales decline. Significant profit can be lost if the product is not managed based on it’s position within it’s life cycle.