Assessing Product Architecture Costing: Product Life Cycles, Allocation Rules, and Cost Models

Abstract

Product families and product platforms have been suggested as design strategies to serve heterogeneous markets via mass customization. Numerous, individual cost advantages of these strategies have been identified for various life cycle processes such as product design, manufacturing, or inventory. However, these advantages do not always occur simultaneously, and sometimes even counteract each other. To develop a better understanding of these phenomena, this paper investigates the cost implications of the underlying design decision: the product architecture choice. The investigation includes factors such as product life cycle phases, allocation rules, and cost models, all of which impact the cost analysis results. Based on this investigation, directions for future research on product architecture costing are provided.

Product architecture assessment: a tool to link product, process, and supply chain design decisions

“…Trade-off analyses that compare, for example, the cost savings through component commonality with longer product development times or that compare risk pooling in the supply chain with the additional cost for a more expensive joining mechanism can help to identify solutions that are optimal across the entire supply chain. The product architecture serves as the connection point for these trade-off analyses, and the product architecture assessment methodology presents a structure to which cost models and similar tools can be connected (Fixson, 2004).…”

The need for a computational structure of LCC

“…This depends on the choice among the alternatives involving product architecture (Fixson 2004;Asiedu and Gu 1998). This well-established concept of LCC as a discounted cash flow analysis has been borrowed by LCA practitioners, but actually deviates from some basic features of the LCA model .…”

Principles for Managing Technological Product Obsolescence

“…Recent studies indicate that the best time to extend a product's life time is at the early conceptual design stage [9], [10]. It is most beneficial at this stage because it is the place where changes are least costly to make yet have the greatest impact on costs over the entire life cycle.…”