FORMULATING DYNAMIC STRATEGIES USING DECISION CALCULUS

This paper presents an applied methodology to assist managers in strat egically setting prices and allocating resources over the product, bra nd, or adoption (diffusion) life cycle. While substantial theoretical work has been achieved in this area in the management science and oper ations research disciplines, approaches which can be implemented as ma nagerial tools are generally lacking. Our methodology, which has been applied as a PC-based decision support tool in the telecommunications industry, marries the dynamic optimization literature with decision ca lculus approaches offering sufficient flexibility for applied contexts . We discuss the approach and describe its use to derive optimal price and advertising policies. Strategies not commonly suggested using tra ditional formulations are also presented. (C) 1997 Elsevier Science B. V.