Of course, none of this information is likely to be known with certainty. Lacking a crystal
ball, managers cannot exactly predict how long the fad will last. They can, however, use
their industry knowledge to form an estimate. Managers can analyze past fads,
complementing this historical information with their insights about why their particular
product might be either more long lasting or shorter-lived. The marketing area might be
able to contribute information about expected length of high-demand, as well as
information on how sales change in response to price decreases. Likewise, the operations
area may be the best source for information on how practicable and costly it is to use the
machinery producing the faddish toy for other purposes. Managers need to collect the
necessary information about how both revenues and costs will shift with changing
demands, finally arriving at an estimated probability, or, better yet, a probability
distribution for the toy’s life.