Abstract

This research seeks to develop a system dynamics (SD) model to address challenges associated with the product line extension (PLE) problem. In this work, we specifically consider the "Two-Generation Product Line Extension (TGPLE) Problem", where a firm introduces a product variant in the market and plans to extend the launch to include a newer generation product in a resource-sharing dual-sourcing (RSDS) environment. We begin by identifying the key factors that influence product line extension, and we developed a TGPLE-RSDS construct based on three (3) inter-related systems: Market System, Production System and Supply Chain System. The proposed TGPLE-RSDS construct also illustrates the dynamic and complex nature of the problem, thus setting the foundation for approaching the problem using SD modeling. A stock-and-flow diagram (SFD) was then developed to further analyze the TGPLE-RSDS system and to develop the interplay between system attributes. This was followed by the establishment of the mathematical relationship between problem parameters and variables. To demonstrate model applicability, we present the practical case of the launch of two generationally-distinct technology-intensive products where we utilized the simultaneous and sequential launch strategies to show that our proposed model is capable of determining appropriate levels of innovation, preannouncement and launch timings and supply chain coordination for resource allocation between the old and new generation products. We then discuss the managerial implications of our findings. This research contributes to the PLE literature through the development of a system dynamics model to capture the dynamic and non-linear complexities of the PLE problem in response to the limitations of optimization and game-theoretic approaches that are mostly used. Furthermore, this research contributes by addressing the problems encountered in determining the appropriate timing and innovation differentiation for resource-coupled multi-generational products under multi-sourcing supply chain systems.

Department(s)

Engineering Management and Systems Engineering

Publication Status

Full Text Access

Keywords and Phrases

Dual-sourcing supply chain; Product line extension; Resource sharing; Sequential launch; Simultaneous launch; System dynamics modeling

International Standard Serial Number (ISSN)

0957-4174

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2026 Elsevier, All rights reserved.

Publication Date

25 Sep 2026

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