Production volume planning for a phone-replacing device: from demand forecast to build

You have built a new kind of device intended to replace the mobile phone. Explain how you would decide how many units to manufacture: estimate the demand, make your assumptions explicit, turn the estimate into a production number, and show how you would check it. ```hint Split the problem in two First estimate how many people would buy the device in a defined period; then ask what, besides that demand, decides how many units you actually build. ``` ### Clarifying Questions - What do we know about the device: its price relative to today's phones, and whether people's existing apps will work on it? - Which markets does it launch in, and what period should the number cover: the launch run, the first year, or longer? - Is it meant to replace smartphones, basic phones, or both? - Will it be sold through carriers and retailers, or only directly? ### What a Strong Answer Covers - The device, price, launch markets and time horizon, stated as explicit assumptions - A demand equation that starts from a defined pool of potential buyers and narrows it with labeled adoption assumptions - Correct, unit-consistent arithmetic, a sanity check from an independent reference point, and a range rather than a single figure - How the demand estimate becomes a production quantity, including inventory needs and the cost of building too many or too few - How the number would be revised as real demand signals arrive ### Follow-up Questions - Which assumption moves your estimate the most, and what research would you run before launch to tighten it? - Pre-orders in the first week come in at three times your forecast. What do you change? - How would your answer change if the device cost twice as much as a flagship phone?