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All kind of product have a life cycle, suppose we manufacture a smartphone, in order to develop a smart phone which is up to date we have to research the market and the peoples need, then you have come up with a idea what people are looking for and then you build a prototype and test it. After a successful test you are ready to sale your product to market, you need a lot of advertisement and promotion, After that you will see the output or what we called revenue. In a certain time your product will hit the market and after some year the technology you have used will get older. Than you need come up with a new product for new market.
see, there is a development cost which include market research and prototype building and there is also a closing cost for your product but you will achieve the revenue only from when your product is in every store. you need to come with a selling price which cover all of this post production cost and the production cost for new one. This is called a production cycle. Allocating the resources in all cost centers and come up with market oriented revenue.
