A smartwatch seller wants to determine how many units of a new model release are required to be held as finished goods and how many units should be held as work-in-process (WIP) stock leading to the new model launch date. Which of the following analyses will allow the manufacturer to calculate the required stock levels to avoid backlogs, inventory losses, and other issues?

A new model launch is characterized by high demand uncertainty, as no historical sales data exists. Scenario-based analysis is the most appropriate tool because it allows planners to model different potential outcomes ("what-if" scenarios), such as high, medium, and low demand, or potential supply disruptions. By evaluating the impact of various inventory levels (both WIP and finished goods) under each scenario, the company can make a robust decision that balances the risk of stockouts (backlogs) against the risk of excess inventory (losses), ensuring a more resilient launch strategy.

A. Descriptive analysis looks at past data ("what happened"), which is unavailable for a new product launch.
B. Prescriptive analysis suggests an optimal action but typically relies on stable assumptions, which are lacking in a new launch's high-uncertainty environment.
D. Predictive analysis forecasts a single likely outcome ("what will happen"), but it doesn't inherently evaluate risks or trade-offs across multiple potential futures.

1. Chopra, S., & Sodhi, M. S. (2004). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review, 46(1), 53-61. This article advocates for modeling uncertainty and using scenario planning to build more resilient supply chains, especially when facing unknown risks.

2. Waller, M. A., & Fawcett, S. E. (2013). Data science, predictive analytics, and big data: a revolution that will transform supply chain design and management. Journal of Business Logistics, 34(2), 77-84. The paper distinguishes between types of analytics, noting that scenario analysis is critical for strategic planning under uncertainty. https://doi.org/10.1111/jbl.12010

3. Stanford University. (n.d.). MS&E 260: Introduction to Operations Management, Lecture Notes on Forecasting. Course materials often highlight the limitations of quantitative forecasting for new products and the need for qualitative methods and scenario planning to address uncertainty.