ABSTRACT
One of the most fundamental product decisions which any company faces is the question of how to develop and launch new products and whether the overall investment required is financially justified. As discussed in Chapter 7 and elsewhere, the financial analysis of such long-term decisions (the relevant time-scale for the decision is clearly linked to the particular product’s life cycle) is complicated and necessarily based on a series of assumptions and managerial judgements. Therefore the use of sensitivity and risk analysis is important and this may include the use of decision trees and similar techniques.
