Firm Z is developing a new product. An early introduction (beating rivals to market) would greatly enhance the company’s revenues. However, the intensive development effort needed to expedite the introduction can be very expensive. Suppose total revenues and costs associated with the new product’s introduction are given
R = 720 - 8t and C = 600 - 20t + .25t2,
by where t is the introduction date (in months from now). Some executives have argued for an expedited introduction date, 12 months from now (t = 12). Do you agree? What introduction date is most profitable? Explain.